Why Do So Many Companies Incorporate in Delaware?

DelawareHave you ever wondered why so many companies are incorporated in Delaware and why so many LLCs are formed in Delaware? Companies incorporate in Delaware because of its corporate-friendly environment, which 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:

Why 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.

Another reason why so many companies are incorporated in Delaware that 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. 

if you're looking for one more reason to incorporate in Delaware, Harvard Business Services, Inc. will happily take care of all the necessary paperwork for you, so file your Delaware company with us today.

Form an LLC or a Corporation on our website to start enjoying the benefits of a Delaware company 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.

More By Rick Bell

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

Alain said: Wednesday, August 16, 2017

So why did have to provide my name and SS to do the SS4 form and they had to link that to my SS?

HBS Staff replied: Thursday, August 17, 2017

The IRS requires the SS number if the member or officer has a SSN; this is the policy of the IRS.  

Steve clark said: Monday, June 22, 2015

This was very helpful as I navigate the path foru new start up.

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