The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
For the first time in over 26 years, the Delaware Division of Corporations is overhauling its computer platform. This upgrade will not only affect the database and processing system, but also some of the actual certificates issued by the Division of Corporations. The change is scheduled to take place over Labor Day weekend, so if you order any documents on or after Tuesday, September 8, 2015, you may notice a difference in previously obtained documents.
What exactly is being altered? The most significant change to these documents is the font in the headers and footers. The new documents are more simplistic in design, with a plain, block-style typeface called Thames Serial Regular. The documents issued in the past featured italics in the headers and footers, a font called Zapf Chancery Italic. The font within the body of the documents will remain the same Zapf Chancery Italic font. In addition, the signature section for the current Secretary of State will not change.
If you frequently order these types of documents, you will no doubt notice the modification in their appearance immediately. You may be concerned you are not receiving the same documents you have acquired in the past, or that the new documents lack legitimacy due to the simple font. However, there is no need to worry, as the validity of the documents remains intact. The documents can still be utilized in order to open a bank account, apply for a business loan or to submit along with your Foreign Qualification application.
The Division of Corporations will continue to issue these documents electronically, in a black and white format. Thus, when you receive one of these documents via email, it is indeed considered an original and can be used as such. If at any time you need to verify the authenticity of a document, you can simply visit the Division of Corporation’s website and enter the unique Authentication Code Number listed on your particular document.
For reference, here is an example of what the Certificate of Good Standing and Apostille documents looked like prior to the system upgrade:
Once the Division of Corporation’s system implementation is in place, here is what the documents will look like:
Some people think the new documents have a clean, streamlined appearance while others will likely feel the documents look boring and flat. Regardless of your personal preference, let us help you obtain a Certificate of Good Standing whenever you may need it for your business entity.
If you thought our summer sales were great, then you’re going to love what we’re doing for the month of September. This is unlike any discount we have ever offered here at Harvard Business Services, Inc. For the entire month of September, we are offering a $60 discount off all our business formation packages.
The discount will be valid starting at 12:00 AM EST on September 1, 2015 and will end at 11:59 PM EST on September 30, 2015. To apply your discount, simply enter “DE2015” when you complete our online order form.
All of our packages feature all-inclusive pricing and include the following:
To view and compare all our business formation packages, please visit Our Services page for detailed information.
With the kids heading back to school and summer coming to a close, there is no better time to start a business than right now. When you’re ready to form your new Delaware corporation or LLC, simply fill out our online order form, call 1-800-345-7400, email firstname.lastname@example.org, use live chat or Skype (Delawareinc) and one of our knowledgeable business formation specialists will be ready to assist you.
After almost six months since the end of the 2014 calendar year, the Delaware Secretary of State has finally released the much-anticipated Annual Report, which highlights the accomplishments of the Delaware Division of Corporations for the 2014 year. Once again, there were statistics that stood out, including a record breaking 168,966 new company formations, an increase of over 65 percent since 2009. The Delaware limited liability company continues to flourish, and is the most commonly formed entity in the state of Delaware, accounting for 72 percent of all new business formations in the state. Since the LLC eliminates the formalities associated with corporations, such as bylaws, meetings, maintaining minutes of meetings, having a Board of Directors, issuing stock, appointing officers and other corporate formalities, the LLC can be used to operate very different companies, such as a simple holding company, a consulting firm or a plumbing company. Thus an LLC entices all types of people since it is easy to operate and oversee due to the lack of corporate formalities. The corporation, on the other hand, is still used by many people trying to raise capital by selling shares of stock, and it accounted for 21 percent of the new formations in Delaware in 2014. The state continues its dominance in the publicly-traded markets, accounting for almost 66 percent of all the Fortune 500 companies. Companies looking to offer Initial Public Offerings (IPO) almost always choose Delaware. In fact, over 88 percent of all IPOs chose Delaware in 2014, up from 76 percent in 2010.
Delaware enacted legislation allowing for a Public Benefit Corporation to be incorporated in the state of Delaware on August 1, 2014. The Public Benefit Corporation is similar to the General Corporation and is a for-profit entity; however, a portion of the profits are directed toward a particular benefit instead of all profits being distributed to shareholders. This unique business structure allows for a company to improve the world while also paying dividends to shareholders. In 2014, there were only a total of 158 Public Benefit Corporations formed in Delaware, but Harvard Business Services, Inc. is proud to be the Registered Agent for 20 percent of the total Public Benefit Corporations formed in the state.
The state of Delaware strives to keep Delaware Corporate Laws as dynamic and strong as possible in order to continue attracting business people from around the world. The Delaware Corporate Law structure and the Division of Corporations are an integral part of Delaware’s economy. Amazingly, 26 percent of the state of Delaware’s revenue originates from fees paid to form a Delaware company, file amendments, and retrieve documents and other filings, as well as annual state Franchise Taxes. As a resident of Delaware, I feel it is extremely important for Delaware legislators to focus on keeping Delaware the “Incorporation Capital.” Delaware is currently one of the few states without sales tax, primarily because of the income generated by its status as the “Corporation Capital” of America.
For any questions about Delaware companies, or if you would like to form a Delaware LLC or corporation, please feel free to contact me at 800-345-2677, Ext 6131 or email me email@example.com.
Citation: Delaware. Delaware Divison of Corporations. “2014 Annual Report.” Corp.delaware.gov. Delaware Divison of Corporations. n.d. Web. 10 August 2015.
Can you imagine using the same computer database you had in 1989? As absurd as it sounds, this is exactly where the Delaware Division of Corporations has found itself toward the end of the year 2015. However, that is about to change.
For the past several years, the Delaware Division of Corporations has been working on a new computer platform. This platform is scheduled to go live on September 8, 2015 at 8:00 AM EST. In preparation of this date, the Delaware Division of Corporations will be closing for business at 4:30 PM EST on Thursday, September 3, 2015. No filings (including Franchise Tax payments), document retrievals or even information searches can be processed during this time.
The Division of Corporations has chosen to launch its new platform over the Labor Day weekend in order to minimize the number of business days it will be offline. However, the closure will still cause delays in approval times for filings submitted the week of September 8, 2015. We also expect delays on the filings submitted before the closure on September 2nd and September 3rd.
At Harvard Business Services, Inc., we understand how important it is for you to receive your filed documents as soon as possible after filing. In order to minimize the inevitable delays due to the Division of Corporation’s closure, we are announcing the following work schedule for the week preceding the closure:
Monday, August 31 and Tuesday, September 1: All filings will be submitted via standard procedure with the Delaware Division of Corporations. We do not anticipate any delays on these orders.
Wednesday, September 2: All filings will be submitted with complimentary expedited service – at Harvard’s expense -- in the hope that our clients will receive their approved filings before the Division of Corporations shuts down its database the following day. Any document not approved before the closure will be among the first to be approved once the system returns online.
Thursday, September 3: Again, all filings will be submitted with complimentary expedited service in the hope that our clients will receive their approved filings before the Division of Corporations shuts down its database at 4:30 PM EST. Any document not approved before the closure will be among the first to be approved once the system returns online. All filings submitted to us by 4:00 PM EST will be entered into the Delaware Division of Corporation’s database that day. All filings received after 4:00 PM EST will be filed on Tuesday, September 8, 2015.
Friday, September 4: The Delaware Division of Corporations is closed. Our office will be open until 12:00 PM EST. We will be accepting orders, all of which will be processed on Tuesday, September 8th when the Division of Corporations re-opens for business. However, no filings will be processed by the State on this day.
Tuesday, September 8: Normal business resumes at both the Delaware Division of Corporations and Harvard Business Services, Inc. However, please expect significant delays, as approval and processing times may take longer than what is stated on our website. We will work diligently to process all orders as quickly as possible, but delays will be inevitable. If possible, please plan ahead and submit orders early in the week of August 31st. We at Harvard Business Services, Inc. truly appreciate everyone’s patience during this time.
The Delaware Division of Corporations’ official message about its system upgrade and closures can be found here: follow this link.
The Delaware general corporation has had the strongest type of company structure in the United States since the late 1800s.
At that time, major entities, such as the railroads, Standard Oil and The DuPont Company, needed to arrange themselves into organizational structures that could provide for the governance of the companies once they had grown beyond their famous founders.
The general corporation is perfectly designed as an entity for engaging in business, yet it also provides a way to raise capital, as needed, throughout the life of the company.
In its simplest form, the general corporation has three tiers of power: the shareholders, the directors and the officers. The shareholders own the company; the directors manage the company; and the officers run the company on a day-to-day basis.
The bylaws of the company set forth the powers and the limits of power in each of the three tiers. Each group may have separate priorities, and they may clash occasionally.
When one tier rises up against the others, a takeover battle may ensue; takeover battles are usually fought and resolved in the Delaware Court of Chancery.
In this unique business court, a single judge decides the case—there are no juries, no tribunals and no 12 angry men. One judge determines—quickly—which party shall prevail, according to 200 years of laws and legal precedents.
It is said that the Chancellors of the Court respect the good faith decisions of directors over the profit priorities of shareholders, but a majority of shareholders can generally elect a new Board of Directors if they don’t like their current directors.
The rules on how these three tiers interact with each other are embodied in three general knowledge bases. The code, which is the written law passed by the state legislature (in this case, the Delaware General Corporation Law).
The case law, handed down by the Delaware Court of Chancery and the Delaware Supreme Court over the past 200 years; and Letter Rulings, which are individual, judicial decisions on a myriad of minute details that come up in court cases.
Stockholders are granted two rights that directors and officers are not permitted: the right to vote for the Board of Directors and the right to share in the dividends of the company when the directors declare dividends.
The shareholders, however, cannot operate the company; they cannot walk in and start telling people what to do. They act as a group, in a meeting, not individually. (Unless one person owns more than 50% of the company, in which case s/he could control the entire company and all three tiers of power.)
The Board of Directors also acts as a group in meetings. Directors generally do not act individually. Meetings must be announced in advance, to all Directors, and each meeting much be attended by a majority of directors in order to be a legal meeting.
The Board of Directors makes all the important decisions in the company; it is responsible for company policy and overseeing the managers.
The directors determine what the company will do with its profits, and they control the sale of stock in the company. They hire the officers of the company to run the business on a day-to-day basis.
The officers work at the pleasure of the Board of Directors, or by contract with the Board of Directors. Officers are usually the President, Vice President, Secretary and Treasurer, but the company’s bylaws can prescribe any officers and their titles, responsibilities and duties.
Officers are responsible for the conduct of the company as well as the profitability. If they fail, they usually get fired, quickly; if they succeed, they become superstars.
This unique structure, with its three mandatory tiers of power, deserves a great deal of credit for the success of the American Industrial Revolution, the American economy (since 1900) and the success of Wall Street itself.
This structure differs greatly from other forms of company organization, such as the sole proprietorship or the partnership, both of which precede it, as well as the LLC, which followed it chronologically.
If your vision is to form a big company, like Apple, Google or Dell, you couldn’t pick a better corporate organizational structure than a Delaware general corporation.