Why Do So Many Companies Choose to Incorporate in Delaware?

If you are starting a new business, you might want to think about incorporating in Delaware. More than half of the publicly traded companies in the U.S. are incorporated there. The state laws of Delaware provide five main benefits to businesses. Read on to learn more about these benefits and how they might help you.

1.   Solve disputes with a judge, not a jury.

The Delaware Court of Chancery, which was established in 1792, allows companies to solve disputes with a judge instead of a jury. This means that disputes can be handled rather quickly. Plus, this specific court only handles matters of business law. The judges specialize in corporate law and only hear corporate law cases.

2.   Delaware offers several ways to minimize your taxes legally.

There are three main ways that incorporating in Delaware can help ease your tax burden. First, Delaware does not tax your profit on items like royalty payments, trademarks, or copyrights. Second, organizations that are incorporated in Delaware but conduct their business primarily in other states are not obligated to pay state corporate income tax to Delaware. Finally, companies may declare certain types of revenue in Delaware rather than in the state where their business activities actually occurred. It is for these reasons that Delaware is sometimes thought of as a tax haven.

3.   Setting up your new corporation is quick, easy, and very private.

The paperwork to incorporate your business in Delaware is much simpler to complete than that of most other states. Plus, because there is not a lot of personal information that needs to be provided, the individuals filing for incorporation can maintain their privacy. This privacy also helps executives avoid personal liability should a dispute arise in the future.

4.   Delaware offers flexible corporate structuring.

In Delaware, you have flexibility when it comes to structuring your corporation and selecting its board members. Shareholders, directors, and officers do not necessarily have to be residents of Delaware. Plus, unlike some other states, Delaware allows one person to be the director, shareholder, and officer of a new corporation.

5.   Venture capitalist investors and investment banks prefer Delaware corporations.

If you anticipate pursuing venture capitalist funding or trading your company publicly, it would be in your best interest to choose Delaware. By incorporating here in the beginning, you can save yourself the time and expense involved in converting your business down the road.

How to Incorporate in Delaware

If you are ready to incorporate in Delaware, Integrated General Counsel is here to help. Allow our experts to help you create your new business in the state that best suits you. Contact us today to learn how we can help.

Share this on...Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Email this to someone

Written by Integrated General Counsel

Our focus includes handling a variety of corporate matters and also includes litigation in state and federal courts. Our current practice includes providing transactional services and representing a variety of small and medium-sized companies as their outsourced general counsel.