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:

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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