Why Companies Incorporate in Delaware

By Brett Melson Monday, September 29, 2014

Buyouts of large companies have been dominating news headlines recently. These are just a few that we spotted in one week:

"Zillow to Acquire Trulia for $3.5 Billion"
The merger of these competitors will create a giant repository for online listings for real estate and home values.

"Dollar Tree to Buy Family Dollar for $8.5 Billion"
With this acquisition, Dollar Tree will become North America's biggest discount retailer.

When big company acquisitions and mergers take place, Delaware is typically involved. That’s because 60% of Fortune 500 companies, 50% of publicly traded companies, and 50% of all American corporations are based in Delaware. You can find the words, "a Delaware company," on the first page of SEC filings from such giants as Facebook, Kayak, Twitter, Apple, American Airlines, Wal-Mart, Bank of America, JP Morgan Chase, Berkshire Hathaway, Google, Cargill, General Electric, Coca-Cola, Halliburton, Ford...and the list goes on. Delaware has practically become synonymous with corporations and LLCs.

Ever wondered why companies incorporate in Delaware? Delaware attracts these marquee names—big corporations as well as small-time businesses—for several reasons.

The Delaware general corporation law has the most advanced and flexible corporate statutes in the United States, thus offering predictability and stability. It has been shaped over the years by corporate law experts and has been protected from special interest group influence.

The Court of Chancery is the very highly respected court which determines disputes involving the internal affairs of many thousands of Delaware corporations. A great amount of the world's commercial affairs are conducted through this court. With five very expert chancellors and no jury, complex business issues are decided here.

Cases from the Court of Chancery are appealed to the Delaware Supreme Court, which has five very experienced justices and is the ultimate word on Delaware law. These courts have a history of issuing reasoned and well thought-out opinions, allowing businesses to review prior cases to understand the impact they will make in the future.

The state legislature continually reviews business statutes and recommends updates which keep business laws current. The Secretary of State’s office has a customer service-oriented staff which exists to provide efficient and expedited service.

Delaware is known for having the most business friendly laws for starting and running a company, so there is no wonder that so many giants, as well as small businesses, want "home" to be in Delaware!

Interested in forming your own Delaware company? You be done in minutes with our easy-to-use online order form! We're also available to help over the phone (800-345-2677), email, or live chat.

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