Why Do So Many Companies Incorporate in Delaware?

Companies incorporate in Delaware because of its corporate-friendly environment, whichwhy do so many companies incorporate in delaware offers numerous benefits in terms of convenience, tax liability and legal protection for businesses. Other pages on this site go more in-depth on the question of "Why incorporate in Delaware?" but we've distilled the answers down to a short list of bullet points here:

Reasons businesses incorporate in Delaware:

  • In Delaware, one person can hold the title of each of the officers of the business.
  • Delaware has no minimum bank account requirement for a company’s bank account. This is in contrast to a number of states that require a $1,000.00 minimum bank balance.
  • Delaware does not require business owners to list their names when filing business formation papers; therefore, no names appear on the public record and your company can maintain its privacy.
  • Delaware does not impose state income tax on businesses that do not operate within the state.
  • When you form a company in Delaware, Delaware is the domicile of your company, thus the rules and regulations your company follows are the Delaware corporate laws as applied by the Delaware Court of Chancery. Delaware is famous for its fair and flexible corporate laws and its case law, as dispensed by the most respected business court in the United States, the Delaware Court of Chancery.
  • Directors are free to set any price on shares of stock they wish to sell.
  • The process to register a business in Delaware is straightforward and uncomplicated; if you do so online, by phone or by mail through Harvard Business Services, Inc, we make it easy, fast and affordable for you.

You do not need to visit Delaware in order to form a business in the state. Delaware's Division of Corporations is the best in the world at processing business formation filings quickly, and it encourages entrepreneurs from across the country and around the world to form their businesses here. 

We can take care of all the necessary paperwork for you, so file your Delaware company with us today.

 

Image Attribution: Tichnor Brothers

*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.

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There are 7 comments left for Why Do So Many Companies Incorporate in Delaware?

Murtatha J said: Sunday, May 8, 2022

What are the advantages and the difference between establishing an international company in Delaware from Washington or Oregon state?

HBS Staff replied: Monday, May 9, 2022

Hello Murtatha,

Thank you for your question. Delaware has been rated as the #1 state to incorporate a business in due to the Corporate Law structure. The Delaware Court of Chancery is run by Judges who are elected by the Governor and have established a body of laws to protect the owners of the company if a lawsuit presented itself. You can read a more indepth article by clicking on the link https://www.delawareinc.com/blog/what-is-the-delaware-court-of-chancery

Cam said: Tuesday, April 26, 2022

If I have an llc registered in Delaware, don’t I need a business license to show that I’m licensed if I do business in another state? If so, how do I secure that licensed document?

HBS Staff replied: Wednesday, April 27, 2022

Hi Cam, Thank you for your question and for reading our blog. Yes, generally the next step after forming your company in Delaware is to file for Certificate of Authority (aka Foreign Qualifcation) in the state in which you are physically doing business. Once you obtain approval then you would obtain a Business License from the County. We will be happy to reach out to further go over this.

Rico Rivera said: Sunday, August 15, 2021

Question, what about forming an llc in Delaware that will be operating commercial vehicles in all 48 states?

HBS Staff replied: Monday, August 16, 2021

Hi Rico, Thank you for reading our blog. We will have a member of our sales team reach out to you. 

Heidi said: Monday, June 21, 2021

Hello! If I incorporate in Deleware but live in Florida, do I have to file foreign agency in Florida? Aren't there more fees involved if you live and operate in another state?

HBS Staff replied: Tuesday, June 22, 2021

Hi Heidi, Here is some information about foriegn qualifications in Flordia: https://www.delawareinc.com/blog/?doing-business-in-florida-as-a-foreign-corporation. If you need additional guidance, please give us a call 1-800-345-2677 and one of our sales executives can walk you through the process. 

Henry r narcisi said: Monday, May 24, 2021

Can I use my fein number via my previous Corp that I am reorganizing?

HBS Staff replied: Tuesday, May 25, 2021

Hello Henry,

The Federal Tax ID Number never disappears and is always associated with the company even if it is not an active entity. https://www.delawareinc.com/blog/an-ein-number-never-dies 

 

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