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The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.

How to Choose a Delaware Registered Agent
By Amy Fountain Tuesday, August 30, 2016

how to choose the best delaware registered agent

Delaware law dictates that every Delaware company (whether a corporation, LLC, LP, non-profit corporation or a public benefit corporation) must appoint a Registered Agent.

 

Whether you are forming a new business entity or need to find an alternate Registered Agent for an existing company, there are plenty of Delaware Registered Agents available.

 

How do you know which Registered Agent is best suited for you and your company?

 

Here are 10 specific features to look for in a Delaware Registered Agent:

 

  1. A physical office located in the state of Delaware, as per the statutory code.
  2. Office is open and available during normal business hours to accept Service of Process and answer your questions. 
  3. Established system to forward all Franchise Tax notices from the Delaware Secretary of State. 
  4. Direct, online access to the Delaware Secretary of State, so you can quickly obtain company documents, such as a Certificate of Good Standing, in only two hours.
  5. Many years in business, with the experience to handle any type of situation. 
  6. Trusted and respected in the legal community.
  7. Offers you access to customer service in a variety of ways:
  • Telephone
  • Fax  
  • Email
  • live chat
  • in-person office visit    
  1. Provides excellent, reliable customer service with a rapid response time. 
  2. Has many positive reviews from other clients on a third-party review site like the Better Business Bureau or TrustPilot.
  3. Offers competitive and economical annual rate for Registered Agent Service, without hidden fees or bait and switch tactics.

 

Harvard Business Services, Inc. proudly possesses all of these attributes; plus, we offer an array of additional services that can benefit your company.

 

You can form a new company with us and feel confident, knowing you are establishing a relationship with the best Delaware Registered Agent. 

 

If you already have a company formed in the state of Delaware but your current Registered Agent does not meet these standards, you should make the switch now!

 

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Podcasts We Love: 5 Reasons Not to Sell Your Business
By Veselin Ganev Monday, August 29, 2016

business podcasts

 

Our featured podcast this month is called Tropical MBA and is the brainchild of authors Dan Andrews and Ian Schoen. Episodes of their show have been used and integrated into business school curriculums across the United States.

 

The Tropical MBA podcast has also been downloaded over a million times and has active listeners in more than 100 countries.

 

The show’s focus is on building location-independent (or at least office-independent) businesses that can be run from anywhere in the world—hence the name Tropical MBA.

 

The podcast discusses a wide array of business and entrepreneurial topics, such as:

 

  • Bootstrapping
  • Business know-how
  • Generating worthy business ideas
  • Apprenticing and mentoring
  • Team building
  • Business culture

 

This episode, titled “5 Reasons Not to Sell Your Business,” is the 314th installment of the podcast, and was inspired by the fact that Dan and Ian were actually entrepreneurs themselves. They developed an online e-commerce product business, which generated more than seven figures in sales. About a year ago, they decided they wanted to sell their business, so they did.

 

While Dan and Ian have not felt regretful about selling their business, they have thought about a number of scenarios if they had continued running it rather than relieving themselves of their company.

 

The episode discusses the hypothetical ins and outs of why, if you are in a similar position, (thinking about selling a business you’ve developed from the start-up phase), this may not be the best idea for you.

 

Dan and Ian came up with five considerations you should contemplate before marketing your business and inking a deal with a potential buyer:

 

  • If you sell your business, you are going to find yourself with some cash in your bank account. Chances are you are going to try and make that money create more money, so start looking for investments. The thing to remember, according to Dan and Ian, is to not undervalue what you have done so far. They go on to say that many businesses are able to earn at least 20% in net profits, and the possibility of you finding an investment that would yield similar returns is quite slim.

 

  • Do not assume you are going to repeat your success. It is never easy to start a business. There were many things at play when you developed your business, and you were lucky things turned out so well. Maybe you had a great idea, found a unique niche or created a product no one had previously thought about. Great ideas are not easy to replicate, so don’t let your ego lead the way.

 

  • Your business gives you power. When you sell a business, you typically sell because you can make a big exit, meaning you can earn a lot of cash; however, a lot of cash without a company structure acting as a shield will expose you to the open palms of the government, the IRS and any other entity that may have a stake in your earnings from the sale.

 

  • Closing a business sale could take a very long time. The authors themselves needed 18 months from start to finish in order to close their deal. In the meantime, once negotiations begin and a contract is drawn up, everything you put into the business—between the time you sign a contract and close the deal—will likely be unaccounted for, so most people stop investing in their own business. However, if you weren’t selling the business you probably would have continued investing, and may have done even better.

 

  • Your business allows you to shape your goals to your liking. Dan and Ian introduce the concept of the Dreamline; this concept, in short, says that money is not everything and though sometimes you are not short on cash, you may be short on other invaluable things, such as mobility, time flexibility, quality family time and intellectual stimulation. Your business allows for and provides all of those important things.

 

Of course, this is just a short summary of the 20-minute podcast. 

 

Click below to listen to the full episode. If you like what you hear, you can access a full archive of Tropical MBS podcasts.

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Advantages & Disadvantages of a Delaware Series LLC
By Brett Melson Tuesday, August 23, 2016

Advantages & Disadvantages of a Delaware Series LLCThere are several advantages to a Delaware series LLC, which is why so many people inquire about the structure of the Delaware series LLC.

 

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.

 

If there are so many benefits of a Delaware series LLC, why doesn't everyone use the Delaware series LLC structure?

 

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.

 

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Trustpilot Honors Delawareinc
By Rick Bell, Meri Weiss Monday, August 22, 2016

trustpilot reviews harvard business services

 

 

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.

trust pilot

 

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.

 

5 star trust pilot rating

Following are a few of Harvard’s recent Trustpilot reviews:

 

  • Professional, courteous, thorough and affordable services. Second to none.” – H. Mayor

 

  • “The registration process [was] easy and straightforward. Staff answered my questions with clarity. I recommend Harvard Business Services, Inc. for your company registration.” – Mr. Tshikoji

 

  • “Harvard Business Services, Inc. made creating an LLC easy and headache-free. The representatives have been extremely helpful and everything [has been] completely promptly. I have [been] very happy with my decision to use them and highly recommend them to anyone looking for a service to help them form a business.” – E. Ward

 

  • “Perfect. Really professional and reliable.” – I. Ozer

 

  • “Continuing great experience. I have now used Harvard Business Services, Inc. three times, and each time the incorporation was flawless. They are fast, efficient, and well-priced.” – John
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Delaware Certificate of Good Standing: FAQs
By Michael Bell Tuesday, August 16, 2016

delaware certificate of good standingPeople 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:

 

What is a 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 do I need a 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.

 

Why do I need a Certificate of Good Standing?

 

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.

 

How long is a Delaware Certificate of Good Standing good for?

 

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.

 

What is the turnaround time to receive a Certificate of Good Standing?

 

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.

 

How can I order a Delaware Certificate of Good Standing from Harvard Business Services, Inc.?

 

Call our office at 800-345-2677, Ext.6911 or order it directly from our website.

 

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