The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
In my last article, we took a look at Delaware’s Court of Chancery and how its rich history is a part of the Delaware advantage. From that post we learned that the Court of Chancery hears matters of equity where no legal precedent is established, but what happens to business litigation that is purely legal in nature? Commercial cases at law are heard by the Delaware Superior Court, which recently created a new division to identify and streamline resolution for complex commercial matters. In an article entitled "The Delaware Superior Court Establishes A Complex Commercial Litigation Division To Address The Concerns Of The Business Litigant" in the June 2010 edition of The Metropolitan Corporate Counsel, Thomas E. Hanson, Jr. introduces the new Complex Commercial Litigation Division (CCLD) of the Delaware Superior Court. Below is an excerpt of the article that explains with further detail:
Due primarily to the high cost of electronic discovery, delay in reaching a final resolution and uncertainty as to the outcome, there is a consensus that civil litigation must be reformed. To address the concerns of business litigants, and to provide yet another option for the resolution of complex business disputes within Delaware's highly regarded court system, the Delaware Superior Court has established a Complex Commercial Litigation Division (CCLD) effective May 1, 2010. To promote prompt and efficient disposition of complex matters, the CCLD will include a special assignment of experienced judges, tight case management orders to move cases to conclusion, special e-discovery orders to limit expense and avoid disputes and protocols to control expert witness and fact discovery.
Not every business dispute is eligible for the CCLD. To qualify, a case must: (1) include a claim with an amount in controversy of at least one million dollars, (2) involve an exclusive choice of court agreement or a judgment resulting from an exclusive choice of court agreement or (3) be so designated by the president judge. Cases that meet one of these criteria can be brought in the CCLD - a forum that is focused on addressing what matters to parties who file and litigate complex commercial disputes.
The CCLD was designed to address two principal concerns of business litigants: (1) the need for predictable procedures to control the course of the proceedings and to bring such proceedings to a prompt conclusion and (2) the need for reasonable control over the cost of discovery, including e-discovery. The CCLD addresses these concerns by following three primary case administration principles.
First, each CCLD case will remain with the same judge from start to finish. Second, each CCLD case will be administered pursuant to uniform procedures, including the requirement of an early Rule 16 scheduling conference for counsel to meet and confer with the judge. At the Rule 16 conference, a case management order will be entered that covers all phases of the case, including the handling of discovery disputes and dispositive motions, early mandatory disclosures and the exchange of electronic discovery. Third, each CCLD case will be assigned firm pretrial and prompt trial dates that will be given priority as among the panel judges' other trial assignments.
Congratulations to all the graduates of 2010! So, now you’re looking for a job in your field of study or trying to decide what you want to do in life, right? Have you ever thought about starting your own company and being your own boss? It could be your fastest route to success. If this idea sounds interesting but you are not sure how to get started or what type of company you need, keep reading. The process does not have to be complicated or cumbersome.
Three words: Harvard Business Services, Inc.
For almost 30 years, Harvard Business Services, Inc. has been forming and filing companies for entrepreneurs like you all over the world. We will make the incorporating process so easy and painless that in less than ten minutes you will officially own your own company. There are several reasons to incorporate specificially in Delaware. Below are a few answers to some frequently asked questions.
How easy it is form a company in Delaware?
The hardest question we’re going to ask you is what you want to call the company. After that, we will explain your options so you can decide between an LLC and an Incorporation. All we need is your contact information and payment. No signatures and no passports are required.
Do I need a physical address in Delaware or a Delaware bank account?
All you need is a Delaware Registered Agent like Harvard Business Services, Inc. No physical address is required in Delaware, as HBS will be your Registered Agent to receive and forward service of process and other government documents, such as Franchise Tax reports and notices. It is a legal requirement to have a Delaware Registered Agent.
Your company’s bank account can be based anywhere in the world; a Delaware bank account is not required.
Are there any taxes or annual fees in Delaware?
There is no sales tax in Delaware, there is no state income tax for corporations that operate outside of the state of Delaware and there is no inheritance tax. To maintain your company in Delaware there are two annual fees. The annual Franchise Tax is simply what you pay the state of Delaware for the right and privilege of owning a Delaware company. Our annual Registered Agent fee the lowest in the industry,is only $50 per year.
Does Delaware need to know the nature of business or where I am conducting business?
Delaware doesn’t need to know the nature of business or where you are conducting business. With a Delaware company, you can operate business lawfully all over the world.
This year's graduates will not find a friendly market for jobs, yet opportunities abound. Many successful entrepreneurs became mega-rich because they improved an industry they knew well. They followed their instincts. They invented new or better products. Perhaps you should consider forming your own company instead of looking for a job.
You could have the next million dollar idea, just like the original whiz kids Bill Gates and Steve Jobs. Put your own spin on success and maybe you will make a lot of money along the way. It really is possible to form your Delaware company in a matter of minutes!
If you'd prefer to speak with one of our helpful representatives, call 1-800-345-CORP (2677).
It isn’t the $787 billion American Recovery and Reinvestment Act of 2009 or the $700 billion bank bailout that are turning stimulating the economy. The real economic stimulus package is the recession itself, and in this upside-down economy, an atypical group of people are turning things around for themselves and their families.
In the years since Michael Dell used $1000 to transform his college dorm room into an assembly line, many more students are following his lead. Faced with a bleak job market, enterprising students see advantages in starting their own companies; costs are coming down and pressures on nimble, low-cost upstarts aren’t as heavy. Growth is often a result of the Internet, where snazzy websites don’t betray a home-based operation. Entrepreneurs can be more profitable with less need for capital or office space. Taking a risk isn’t necessarily the leap of faith it used to be. According to The Challenger, Gray and Christmas’ job market index, 8.9 % of job seekers started their own businesses in the second quarter of 2009, way up from the record low of 2.7% in the last quarter of 2008.
Young entrepreneurs may be in the spotlight, yet baby boomers are becoming business owners faster than any other group. New businesses started between 2007 to 2008 by 55- to 64-year olds grew 16 percent, faster than any other group, according to Ewing Marion Kauffman Foundation, a nonprofit group that studies U.S. business start-ups. The organization predicts a sustained boom, not in spite of the aging workforce but because of it. This group has built-in advantages, including accumulated business knowledge and funds as well as a network of people to turn into customers, suppliers and financial advisors. Many find that starting a business around lifelong interests or passions is rewarding as well as profitable.
With this trend, the next decade will see the growth of small businesses continue and the social and economic impacts of small business increase.
As the summer season quickly approaches, it is nice to have a list of books to read in case your busy life allows you to head to the beach. I often find that entrepreneurs prefer reading business books to novels, so here is a great list of essential business books from Forbes.com. So sit back and relax with a book and a beer and call it work research.
Small business owners need to read this recent article from The Washington Post. It does a very good job explaining the new law buried in the healthcare bill requiring small businesses to issue 1099 forms to people or companies that sell them more than $600 worth of goods or services, and it offers ideas on how to handle all this new paperwork. Read an excerpt below:
Tucked away in the health care overhaul bill that became law this year was a provision that will require small business owners to keep better records of what they buy. They'll also have to report some purchases to the government.
This new law requires small businesses to issue 1099 forms to people or companies that sell them more than $600 worth of goods or services. It takes the 1099 beyond its most common business use, which is to report money paid to independent contractors or freelancers.
The law doesn't take effect until Jan. 1, 2012, which means owners won't have to worry about the paperwork until early 2013, when they're compiling their 2012 returns. But owners whose books and finances are chaotic might want to get themselves organized in the meantime so keeping track of such payments and reporting them becomes routine.
The law, called a revenue provision, was attached to the health care legislation that Congress passed and President Barack Obama signed into law in March. According to Congress' Joint Committee on Taxation, under the new law a business is required to file a 1099 form "for all payments aggregating $600 or more in a calendar year to a single payee."
Between now and the Jan. 1, 2012 effective date for the law, the IRS will be formulating regulations that spell out what businesses must do under the law. Eric Smith, a spokesman for the agency, said that as with any regulations, the public will be able to comment on those regulations before they also take effect.
Because the regulations don't yet exist, it's hard to predict exactly what businesses will have to do to comply.
The law is designed to stop businesses, in this case vendors, from evading taxes on their income. The fact is, there are companies that don't report all their sales, particularly small transactions. But if a customer has to issue a 1099, which reports a payment to the government, the vendor that doesn't report a matching sale could get a letter from the IRS questioning the discrepancy.
There's no getting around the fact that a requirement that companies issue 1099s for purchases will create more work. How big the burden is will depend in part on how many purchases a business makes. But the greater determinant will be how organized the company is. Owners whose accounting system is a pile of receipts jammed into file folders are going to have a miserable time.
The easiest way to keep records of your business purchases is with software that tracks all your expenses. But while software to help small businesses keep their books is relatively inexpensive - some programs cost less than $200 - accountants say many owners are still shy about going high-tech.
The new 1099 requirement might persuade some of the reluctant ones to make the change. Software designed to help run a small business includes payroll applications that can generate 1099s. The companies that make the software will have updated versions that comply with the new law by the time it goes into effect. So the same software that tracks your purchases will be able to create 1099s and make it easy for you to send them to the IRS.
CNN.com also published an informative article.