Delaware Incorporation - A Very Business Friendly State!

By: Gust Lenglet

It could be said that Delaware incorporation is a kind ubiquitous process of forming incorporation, for both people living in US or abroad. For instance, Delaware incorporation is advantageous to companies who intend to offer their shares to the public. Delaware incorporation is definitely much easier and beneficial for businesses when compared to the other states, because of all these contributing factors. Another benefit of Delaware incorporation is that Delaware's extensive and often easily interpretable law. Delaware incorporation is also advantageous because shareholders and directors can make decisions by unanimous written consent in place of formal meetings.

Delaware Incorporation is also a great resource for companies seeking venture funds or an acquirer. Delaware incorporation is favored by sophisticated investors and may broaden corporate opportunities. Another reason for favoring Delaware incorporation is the efficiency of the Delaware Secretary of State and the quality of Delaware judges in handling corporate lawsuits. Delaware Incorporation can really be advantageous as compared to many other states.

Businesses chose Delaware not for one single reason, but because they provide a complete package of incorporations services.  The Delaware General Corporation Law is the most advanced and flexible business formation statute in the nation.  The Delaware Court of Chancery is a unique 210 year old business court that has written most of the modern U.S. corporation case law.  Delaware's State Government is business-friendly and accessible, and the Division of Corporation is a model state-of-the-art. These factors have all contributed to making Delaware a premier legal home to companies around the world.

You don''t have to be a Delaware resident, but Delaware law requires every corporation to have and maintain a Registered Agent in the State who may be either an individual resident, a domestic corporation, or a foreign corporation authorized to transact business in Delaware whose business office is identical with the corporation's registered office. You can pay a fee of approximately $99.00 for resident agent services offered by most incorporators.

You don't need an attorney to perform a Delaware incorporation, but you should contact an attorney concerning legal matters.

 Delaware corporate laws allow more flexibility in conducting businesses. Some additional benefits of a Delaware incorporation are:

• Delaware has a separate and highly-respected business court known as the Delaware Court of Chancery. The court protects corporations in Delaware so that they can focus more on their business operations and reasonable litigations/disputes.

• The costs of incorporation filing and franchise tax fees in Delaware are low.

• Delaware has no minimum requirement to open a business bank account. Most states require at least $1,000.00 in an account to operate a business.

• Delaware incorporation allows privacy and anonymity of company's Director, Shareholder, or Officer.

• In a Delaware incorporation the business owner can be all of the officers (director, shareholder, or officer) of a Delaware corporation him/herself.

• Business entities or business corporations that incorporate in Delaware but do not operate in the State of Delaware do not have to pay state income tax.

• Business entities that incorporate as Delaware corporations and LLCs are entitled to the advantages of asset protection. This means company's assets or company debts are separated from your personal assets.

• Delaware has no sales or personal property tax.

More than 695,000 businesses have their legal home in Delaware, including more than half of all U.S. publicly traded companies, and 60% of the Fortune 500. This may be why Delaware is called the "Incorporating Capital of the World."

In summary, many businesses choose Delaware incorporation because:

• The Delaware General Corporation Law is the most advanced and flexible business formation statute in the nation. The Delaware business Court of Chancery has written most of the modern U.S. corporation case law.

• Delaware's State Government is business friendly and accessible.
   
• Delaware's legal system has been ranked No. 1 in the nation for the fifth consecutive year. That alone warrants considering a Delaware incorporation.
  
  
• Shareholder, member or beneficial ownership information is not public according to current Delaware business entity statutes. Delaware corporations are required to file a complete annual franchise tax report with names and addresses of all directors and the name and address of the officer signing the report. Effective January 1, 2007 all Delaware business entities will be required to provide to the registered agent the name of a natural person, a business address and a business telephone who will be the communications contact for the entity.
   
• Delaware companies that do not operate their business within the state do not file Delaware state corporate income tax returns. There are no taxes on Delaware capital shares or stock transfers or state inheritance tax on stock held by non-residents of Delaware.