The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
In a series LLC, owners need only form one LLC; they can then establish any number of separate series internally, without any additional expenses for the creation of an these individual series.
Regardless of how many entities are contained in your Delaware series LLC, there is just one Delaware Registered Agent Fee and just one Delaware annual Franchise Tax payment of $300.
Each series can hold its own assets, have its own members, conduct its own operations and pursue different business objectives, yet all of the series remain insulated from claims of members, creditors or litigants pursuing assets or asserting claims against any of the other series.
The structure, which has been likened to a piece of honeycomb, has existed for years, but there are still some unknown factors about the Delaware series LLC. The legal separation of the assets and liabilities of each series has not been tested in court.
The United States federal tax treatment afforded to individual series is still uncertain as well. Even though Delaware law clearly provides for the legal separation of each series, it is unclear whether courts and/or jurisdictions in other states would recognize a legal separation of liabilities and assets within what is essentially a single entity.
In addition, other states have not provided concrete guidance on the effect of the series' distinction in regard to state taxes. Furthermore, many banks are not familiar with the series LLC structure and have difficulty comprehending that each series can open up its own bank account.
This is often the biggest hurdle for business owners, as most banks just do not understand the Delaware LLC structure and thus do not know how to open separate bank accounts for each series contained in a single LLC.
Should the owners of a series LLC need to seek council or tax advice, it may be difficult, as many attorneys and accountants are still unfamiliar with the structure and therefore cannot provide competent assistance. Regulations on the taxation of the series LLC were proposed back in 2010; however, there is still minimal guidance on how these entities are to be taxed.
Due to the uncertainty of these issues, some people opt to form their new LLC as a series LLC but simply hold off on using the individual series until the myriad issues mentioned above are clarified, and attorneys, accountants and other states become more familiar with the unique structure of the Delaware series LLC.
This way, the series LLC is ready to be utilized in the future and it will not be necessary to amend the Certificate of Formation to allow for the series LLC structure.
Trustpilot Inc. is the Yelp for online merchants. The Wall Street Journal recently called the company the “dominant source of user-generated reviews of businesses online.”
Trustpilot was formed in 2007 by Danish entrepreneur Peter Holten Mehlmann, who asserts that his company has published over 13 million reviews of more than 100,000 brands.
Third-party recommendation companies exist so consumers can pass along their experiences of products, customer service and overall satisfaction (or lack thereof), knowing they will remain anonymous. Companies pay Trustpilot to gauge their real customer experience rating and to increase their own transparency in the marketplace.
Companies who use TrustPilot cannot alter or pick and choose which comments are published. TrustPilot publishes all the reviews, good and bad. That way, the customer can be assured of getting the real experiences of real customers. Strict controls are in place to ensure that only credible reviews from real customers are published.
Trustpilot recently announced that delawareinc (Harvard Business Services, Inc.) has achieved its “Milestone Award” for getting more than 500 reviews with a 9.7 TrustScore (out of 10).
Only 15 companies have achieved such a score in Harvard’s category.
TrustPilot uses a formula, based on the number of reviews a company has, the age of the reviews and the star rating of the reviews.
The online invitations to reviewers are only sent to real customers who have recently used the services of the company.
Mike Bell, Harvard’s Vice President and Director of Marketing says, “We appreciate our customers and we value their opinion. Trustpilot provides a platform where our customers can tell us about our efforts to excel in servicing them. We are proud to receive this award and thank our customers for providing their experiences about incorporating through our services.”
Delawareinc, also known as Harvard Business Services, Inc., has been forming Delaware business entities (LLCs, corporations, limited partnerships and non-profit companies) for over 35 years. The company is one of the top Delaware formation services and has formed over 150,000 Delaware companies for clients all across the country and around the world. Harvard is one of the few Delaware Registered Agents connected directly online to the Delaware Division of Corporations, which allows us to form companies and process official company documents quickly and efficiently.
Following are a few of Harvard’s recent Trustpilot reviews:
People often ask us, "What is a Certificate of Good Standing?" They then tell us they need a Delaware Certificate of Good Standing, and wonder how to get one.
This certified document, which is produced by the Delaware Secretary of State’s office, is required for real estate closings as well as accounting and legal matters.
The Certificate of Good Standing is also known as a Certificate of Status or Certificate of Existence in some states.
Here's what you need to know about the Delaware Certificate of Good Standing:
This document illustrates that your corporation or LLC is a valid Delaware company that has paid all its taxes in the state of Delaware up to the current date. It is signed by the Delaware Secretary of State and attests to the good standing status of your company on the date it is produced and signed.
Most of the time, authorities will accept the document as that proof your corproration or LLC is real and valid, for a month or two after the date of issue, but beyond that, you will need to obtain a newly-issued, updated Delaware Certificate of Good Standing.
When you’re asked to supply one. Don’t order one in anticipation of the need. A Delaware Certificate of Good Standing is typically needed when you open a business bank account, obtain a Certificate of Authority to operate your company in another state, purchase or sell real estate or obtain a loan from a bank.
A Delaware Certificate of Good Standing proves your company is a legal, valid corporation or LLC that was formed in Delaware and is current on its Delaware Franchise Tax payments.
Depending on what the Delaware Certificate of Good Standing is being used for, it will be accepted anywhere from 30 days to six months from the date it is produced and signed by the Delaware Secretary of State.
Under normal conditions, we can guarantee a 48-hour turnaround to get you a Certificate of Good Standing. However, we do offer an expedited service that speeds up the process if you are in immediate need of the document. Call us at 1-800-345-CORP for details.
Call our office at 800-345-2677, Ext.6911 or order it directly from our website.
If you admire hardcore entrepreneurs like Steve Jobs and Richard Branson, you’ll love Elon Musk: Tesla, SpaceX & the Quest for a Fantastic Future. I’m not much of a reader and I finished it in three days. It was literally too exciting to put down.
Elon Musk’s trajectory into the superstar entrepreneur spotlight has been relatively recent compared to Steve Jobs and Bill Gates. He was just ten years old when the PC was introduced into mainstream culture, but even at ten he showed unmistakable signs of greatness. In addition to being exceptionally intelligent, Musk was also an outstanding organizer, an exceptional thinker and a voracious reader. By the fourth grade, he had read through two complete sets of encyclopedias.
Unlike Gates and Jobs, who were driven by producing one project at a time in the evolution of the PC, Musk started with the premise that the only reasonable decision, when deciding your life’s course, is to make the future a better place for all mankind. So he set out to do just that.
While Gates and Jobs were born and schooled in the United States, Musk is a transnational, having been born in 1971 to a Canadian mother and a South African father and raised in South Africa.
He attended the local school system through high school and then attended the University of Pretoria for five months before moving to Canada to attend Queen’s University.
In 1992, he left Canada to study business and physics at the University of Pennsylvania; he graduated with undergraduate degrees in economics and physics.
He then moved on to Stanford University with the intent of earning a Ph.D. in energy physics, but the internet was exploding so he dropped out in order to create his first company.
Compared to Gates, who made his fortune on a single company he started and maintained control of, Musk started several companies before he found his ultimate success.
His first start-up, an online city guide called Zip2 that was partnered with the New York Times and the Chicago Tribune, was sold to Compaq Computer Corporation for $307 million in cash and $34 million in stock options. Elon got a $22 million pay day from the sale.
He then co-founded a second company, X.com, an early pioneering attempt at an online financial services company. A year later, X.com merged with Confinity, which had a branch called PayPal. The merged companies were renamed PayPal. In 2002, PayPal was acquired by eBay for $1.5 billion in stock; this time Musk received $165 million.
The two projects seemed necessary for Musk to accomplish, since nobody else was attending to them and since both are needed in order for human beings to have a brighter future, according to Musk’s way of thinking.
First, he wanted to build a rocket ship transportation company that would carry passengers into space on a regular schedule and enable the establishment of a human colony on Mars. To do so, Musk founded Space Exploration Technologies, or SpaceX, with $100 million of his own money. Musk is the CEO and CTO of the company, which develops and makes its own space launch vehicles and has revolutionized rocket technology.
SpaceX now has contracts with NASA and launches regular successful rocket trips to and from the International Space Station and is the largest private manufacturer of rocket engines in the world.
The second project Musk tackled was building an electric car, one that would hopefully become so popular that the world would abandon the internal combustion engine. In order to do so, Musk invested in Tesla Motors, and joined its Board of Directors, becoming the company’s chairman in February of 2004.
After the financial crisis in 2008, Musk became the CEO and product architect at Tesla Motors, (he currently remains in both positions). The Tesla Roadster was soon unveiled — an electric sports car that can accelerate from 0 to 60 mph in 3.7 seconds and is powered by a lithium ion battery. Tesla Motors also manufactures a Model S sedan and a Model X SUV.
Neither of these groundbreaking projects was easy. In fact, both SpaceX and Tesla Motors required many more millions of dollars than Musk himself could afford to put up, so he had to recruit investors and sell stock in order for these companies to survive.
In December of 2008, both of these dynamic start-ups were desperately in need of cash, and bankruptcy seemed the most likely outcome. Elon Musk himself has stated that he was exhausted and nearing a breakdown.
Then, over the Christmas week, SpaceX received a $1.6 billion contract from NASA and a renewed investment of $40 million in Tesla Motors, saving both the future of both companies.
Elon Musk drives his corporate teams as hard as any entrepreneur has in the past, including Steve Jobs, and he demands the impossible from them. You wouldn’t say working for him was cool or laid-back with Google-style perks like valet parking and multiple on-campus restaurant choices.
Yet he is clearly passionate about what he does—amazingly, Musk announced in 2014 that Tesla Motors will allow its technology to be utilized by anyone, in the hopes that more car manufacturers will begin producing additional types of electric cars.
Although the author of Elon Musk: Tesla, SpaceX & the Quest for a Fantastic Future, Ashlee Vance, set out to write Musk’s biography with or without his cooperation, Vance was eventually sanctioned by Musk, who granted him access to his friends and employees. The book is well researched and the details were checked by multiple sources.
This allowed Vance to accurately describe events in Musk’s personal life that Musk might not have wanted to be included. It makes Musk seem like a real guy, vulnerable and somewhat tragic during his most trying time.
Although his five sons live with him four days a week and he takes them with him in his private jet on special trips, he clearly puts his work and ambition ahead of a stable family life, like many a driven genius, including Jobs, Einstein and countless others.
Ashlee Vance has a healthy respect for Musk, as would anyone who understands the psyche of a man who has been driven from childhood to accomplish great feats. In Musk’s world, a simple premise propels him: to make the future on Earth both safe and viable.
It’s not wealth or power that motivates and consumes Elon Musk with ambition; rather, it’s his vision that mankind must live sustainably and find an alternative planet to live on, in case planet Earth sustains a cosmic, environmental or man-made catastrophic event.
There is much to learn about Elon Musk. He’s an amazing individual who now runs SpaceX, Tesla and Solar City. He’s definitely out to take us all for a ride, in the best sense of the phrase.
Updated August 9, 2016
People from all over the world form Delaware LLCs and Delaware corporations even though they operate their companies from their home state or country. Delaware has been recognized as having the strongest corporate law structure, and the advantages of forming your business in Delaware are extensive.
But what do you do if you have a company doing business in Florida as a foreign corporation?
If you are operating a Delaware corporation in Florida, your corporation will be domestic to Delaware but considered a foreign corporation doing business in Florida. People initially form a Delaware corporation and then register as a foreign entity in Florida (as the same business).
This process is called Foreign Qualification. This is the manner in which Florida grants you permission to operate your Delaware corporation there. It is a very important step that is sometimes forgotten, but if you fail to comply with Florida's local compliance regulations, you may be putting yourself and your company at risk.
Florida, like most states, has a specific set of requirements for Foreign Qualification: a state fee, an application process and a Certificate of Good Standing from Delaware. The Certificate of Good Standing can be no more than 90 days old.
Florida also requires that you have a Registered Agent; the Registered Agent will be required to sign the application. A Director or officer will also have to sign the application on behalf of the corporation. The document Florida returns to you is called a Certificate of Authority. This document is often used to obtain a business license, open a bank account or file a DBA in Florida.
Please keep in mind that applications and paperwork filed in Florida will be on the public record, unlike in Delaware. However, county filing and newspaper publication is not required, unless specifically mandated by the county of the Registered Agent.
Once your business is registered in Florida as a foreign corporation, you will be required to file an annual report. The cost of the annual report is $150, and is due by May 1 of the following year. Often, your Registered Agent will forward you the notice approximately 60 days before the due date. Please note that a Delaware corporation will still be responsible for Delaware Franchise Taxes as well, which are due by March 1.
Harvard Business Services, Inc. is a specialist in Foreign Qualification, and we register companies in Florida, as well as other states, every day. We can help you prepare the application, obtain a Certificate of Good Standing from Delaware and file all the necessary documents in Florida.
Generally, we can obtain your Certificate of Authority in about two business days. We are also able to act as your Registered Agent in Florida. For more information, or to register your Delaware corporation in Florida and start doing business in Florida, please call 1-800-345-2677, Ext. 6130.