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Companies Served Since 1981

The HBS Blog


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

Small Wonder: Why Corporations Choose Delaware
By Rick Bell Thursday, March 5, 2009

why corporations choose delawareThe smallest state in the Union by population, Delaware actually has more companies than people. People often wonder why corporations choose Delaware. Lawyers know it as “The Home of the Corporation” due to its dominance in corporate law for more than 100 years. In this highly specialized field, excellence doesn’t come easily or quickly and dominance comes only after decades of excellence. By every measure, Delaware leads the nation every year in every way in the field of corporate law.

Who says so? For starters, the U.S. Chamber of Commerce. This group sponsors a professional survey annually asking top corporate lawyers to rate the states in categories like the competence and impartiality of judges, fairness and predictability of Juries, fairness of legislators and politicians, and quality of attorneys. For seven years in a row, since the inception of the survey, Delaware has taken the number 1 top honors. For more information follow this link directly to the site:
http://www.uschambermagazine.com/content/0806_4b.htm?n=w

But Delaware’s legal infrastructure is just one of the reasons why companies choose Delaware as a corporate domicile. The state’s Division of Corporations is customer friendly and one of the most efficient governmental bureaus in the world. State-of-the-art computer systems and the friendliest folks anywhere is the winning combination in Delaware. Document filings are processed quickly and for reasonable fees. Many of these dedicated public servants have been working for the Delaware Division of Corporations for 10, 20 or 30 years. In short, they are a pleasure to work with.

The third advantage Delaware has, over every other U.S. state, is a unique court called the Court of Chancery. This court, which has its roots in early English Common Law, settles legal cases between the biggest companies and their shareholders and the rest of the world. The court is world-renowned as a fair and predictable court, which respects the good-faith judgment of Directors.

Finally, Delaware companies are inexpensive to maintain. Small corporations pay only about $100 in annual state fees. LLCs, regardless of how big they become, pay only $300 annual franchise tax. Delaware companies with no presence in the state pay no Delaware income tax, but must have a registered agent in the state.

As one of the top Registered Agents in Delaware, there is a lot more to say about this tiny gem of a state and this blog is where you’ll find out much more. Stay tuned!

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Top 10 Lists: Business Books You Must Read
By Carleigh Lowe Thursday, March 5, 2009

Pile of Books1. The 7 Habits of Highly Effective People by Stephen R. Covey
2. Good to Great by Jim Collins
3. Freakonomics by Steven D. Levitt
4. The Tipping Point by Malcolm Gladwell
5. Purple Cow by Seth Godin
6. Mastering the Media by George Merlis
7. The Effective Executive by Peter F. Drucker
8. Growing a Business by Paul Hawken
9. Guerrilla Marketing by Jay Conrad Levinson
10. The Art of the Start by Guy Kawasaki

Leave a comment & let us know your top choices for business books!

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The Start of the LLC
By Rick Bell Thursday, March 5, 2009

When the State of Wyoming first passed legislation to allow a new type of Hybrid Company in 1977, which provided pass-through tax treatment and limited the owners’ personal liability for the company, almost nobody cared. For ten years almost nothing happened.

It took 14 years before Delaware revolutionized the legal world by drafting the sleekest piece of company legislation ever written. The result was the modern LLC, now available in almost every State, which today accounts for more than half of all new companies formed in the United States.

Delaware LLCs are the most flexible form of company ever devised. Because each LLC is governed by its own internal “Company Agreement” that sets up the structure AND because you have “Freedom of Contract” to draft that “Company Agreement” any way you want. The result is that you can create the structure of the company to fit the situation like a glove.

For example, one “Company Agreement” may be perfect for a holding company which holds real estate while protecting the owners from creditors and bankruptcy, while another “Company Agreement” may be just perfect for a family business where several members of the family own and operate different parts of the business. Two completely different business situations, but because of “Freedom of Contract” the same entity will work, each with its own unique structure.

LLCs are also the toughest entity for a creditor to break through, they require the least amount of paperwork and expense to maintain and they are easily formed for just a few hundred dollars.

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Einstein Failed at Business
By Rick Bell Wednesday, March 4, 2009

Albert EinsteinEinstein, as brilliant as he was, wouldn’t have been able to start a business or even manage a business successfully.

He proved that to his disappointed father, an entrepreneur who built two successful businesses and wanted his son to follow in his footsteps. Einstein tried, and was miserable at it. He ended up packing his things and leaving in frustration. Yet Einstein had a lot in common with today’s new breed of entrepreneur. He envisioned the experiments to prove the world’s greatest scientific theories, as entrepreneurs today envision businesses never before imagined, or possible, in the history of mercantilism.

There are lots of examples of today’s entrepreneurs envisioning businesses that never existed before, like eBay, Google, and many others.  Even Microsoft, when it first started, was a one-of-a-kind business. Bill Gates, Pierre Omidyas (founder of eBay), and Larry Page & Sergey Brin (Founders of Google) are well-known modern day Einstein’s who can create as well as envision.  Two of today’s relatively unknown entrepreneurial Einsteins, Evan Williams (co-founder of Twitter) and Woody Norris (inventor) are best understood by viewing their talks on www.TED.com.

Einstein trusted his vision. He relentlessly pursued his vision and in doing so, he actually fulfilled his vision.  On the gut level, this describes today’s new entrepreneur who is primarily a dedicated visionary. In this global marketplace, the entrepreneurial boom has just begun. More new businesses are going to be created in the next 20 years than ever before in the whole history of civilized man. More creative people will take the path of pursuing their dream by forming a company – and more of you will succeed.

The opportunity to form a company and create a business that uniquely sustains your lifestyle, allows you to be creative and helps your customers, all at the same time, is now available to you and a million others. ALL of you can be successful beyond your wildest dreams. To attain success you must have a vision, be dedicated to your vision and take the RISK of actually doing it. Many of you have already taken the plunge and many of you are just now considering it. At Harvard, we form more than 5,000 companies per year for people like you, and we’ve been doing it for 28 years. Communication among us, the entrepreneurs, is what this blog is all about.

Illustration by Josh Lowe

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Tell Your Story
By Christina Cornelius Wednesday, March 4, 2009

Is Story Making a Comeback?

Whether I am weighing Dove versus Ivory or Cole Hahn versus Kenneth Cole, as a consumer, I tend to consider both facts and anecdotes. Truth be told, however, in recent years, facts, data, and logic have dominated persuasive communication. On the other hand, anecdote has played a supporting role. Recently though, anecdote or what the English major in me wants to call narrative is making a comeback.

Daniel H. Pink, author of buzz-making business book, A Whole New Mind: Why Right-Brainers Will Rule the Future, calls this neither anecdote nor narrative, but rather story and cites it as one of the six key business aptitudes that will make or break success in the next twenty years. “When our lives are brimming with information and data,” he writes, “it’s not enough to marshal an effective argument.” Story, he predicts is soon to become “the essence of persuasion…”

To show us how story works in business, he gives an example. Rushed, selecting wine, one evening for a dinner party, Pink says he honed in on three inexpensive reds, all $9 to $10. Two of the brands attempted to woo prospective customers with what Pink noted as ‘fancy wine adjectives.’ The third wine label was different because it told a story. It read:

The idea for this wine comes from two brothers, Erik and Alex Bartholomaus. They want to sell a great wine, sourced by Alex, labeled with Erik’s art, in a non-serious way for a good cause. Their goal is to pay homage to their late mother….Alex and Erik will donate 50 cents from the sale of each bottle to Hospice of Northern Virginia and/or various cancer research funds in the name of Liliana S. Bartholomaus.

Needless to say, Pink bought the third wine for his dinner party.

There may be better examples out there of how story can be persuasive in a way that a straight description of your product cannot. However, I think Pink’s anecdote does underline three significant points:

  • Story can differentiate a product from others
  • Story contextualizes a product
  • Story delivers information with emotional impact, in a way that a straight description of your product cannot

This seemingly straightforward idea, that story is a critical business aptitude, rings true to me and it affirms a belief on which I built my business.

I became an entrepreneur in 2002, when I incorporated The Writing Studio, LLC with Harvard Business Services, Inc. The Writing Studio’s clients are entrepreneurs and I help them to write business plans, grant proposals, marketing materials, and web copy. I have seen first- hand how an entrepreneur can engage others in their success by telling a memorable story about how they began or how they overcame an obstacle.

There is the story of two women who met for the first time as they waited, one in front of the other, in the unemployment line, and who started their video editing business the next day. I will never forget the story of the contractor and landscaper, not even nineteen years old, who doubled business one dreary winter by advertising through Christmas lights on his office rooftop. And I love the one about a young couple, expecting their second child, who changed their home phone into a 1-800 number and their kitchen into the headquarters of a budding service company.

In my experience, every entrepreneur’s story is inspiring and has the potential to become a powerful force in their success.

When Managing Editor, Carleigh Lowe announced the launch of Harvard Business Services’ first-ever blog—a virtual resource center and a place to share real stories, I knew I wanted to participate.

So today, I have become a blogger.

And I would like to make this, my first post, a call to my fellow business owners—a call that is two-fold. First, I want to encourage you to make this virtual place, a place where you find inspiration and motivation in the stories of others. Second, it is a call to craft your story, if you haven’t already, and to share it with us, and to integrate it into your communication with clients and colleagues.

Our stories play a lead role in our success. Craft yours, Share yours. Let’s try this together and see what it yields.

We want to share the story of your business on The HBS Blog! If you are interested please submit by emailing YOUR STORY in 1000 words or less to our Managing Editor, Carleigh@delawareinc.com.

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