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.
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 we are 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 “Incorporation 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.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.