That head start has given an enormous body of Delaware case law that further maintains it as a favored place for corporate law. Since it has been a state focus for so long, Delaware state government and its Division of Corporations prioritize business formation and support, Markell and others frequently say. Companies: Delaware Economic Development Office. People: Tom Wolf , Jack Markell. Delaware Which coding bootcamp is right for you? Technically Media. Sign-up for daily news updates from Technical.
The judges are experts in corporate law, and the decisions from the court tend to be more predictable than those in other states. Filings are processed quickly. Because Delaware is committed to being corporation-friendly, they will process your filing the same day.
Privacy is protected. When you file in Delaware, you don't need to disclose your directors' and officers' names to the state. This allows for anonymity. Residency is not required. Officers, directors, and shareholders don't need to be residents of Delaware.
You can have a slimmed-down corporate structure. Delaware law allows just one person to hold the role of officer, director, and shareholder, which is attractive to small businesses. Investors prefer Delaware. If you're going to look for angel investors or venture capital, know that most of these prefer you incorporate in Delaware. Disadvantages of Registering in Delaware While Delaware offers distinct benefits, there are also significant drawbacks to incorporating there.
Here are other factors to consider: There are no real tax savings for small businesses. Although Delaware doesn't tax companies incorporated in the state that don't do business there, your home state will tax your company, so you do not avoid taxation.
Filing is more expensive. Delaware's filing fees are significantly higher than other states'. You will pay a franchise tax. Although your company won't pay income tax in Delaware, it will have to pay the Delaware franchise tax based on the shares' value. This is generally minimal for small businesses, but it will increase as the number of shares increases, and as your share value goes up. You may also need to pay a franchise tax in your home state. You must meet your own state's requirements.
Even though you incorporate in Delaware, you still need to meet your state's filing and licensing requirements for conducting business there. You also have to file annual reports in both locations.
It's twice the work and twice the expense to do this. A Delaware registered agent is required. When you file, you'll need to provide your registered agent's name within Delaware, a person or company located in-state, who can accept legal filings on your behalf. If you hire someone to handle this, it's an additional cost for your business. Legal disputes require travel. They, too, can resolve to appoint only their best legal experts to these courts. Chandler, III, has announced his retirement from the court after 22 years.
During his tenure he presided over many high-profile corporate disputes involving such big-name companies as Disney, Yahoo, Microsoft, Dow Chemical, and Hewlett-Packard. Now Delaware is called upon to follow its own finest traditions of appointing another judge equally wise and knowledgeable. President Biden called former Delaware Gov. Former Delaware Gov. She died at the age of
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