More than half of all publicly traded companies, and over 65 percent of Fortune 500 companies, were incorporated in the state of Delaware. Each day more and more startups are doing the same. Delaware has earned a global reputation as one of the best places to incorporate a new business. But why?
It boils down to legal and liability protections of corporate law. The Delaware Court of Chancery happens to be the oldest business court in the nation. It differs significantly from courts in other states in a number of ways:
- Delaware uses judges instead of juries (which significantly speeds up proceedings)
- Delaware maintains the most advanced and up-to-date case law
- Corporate attorneys in Delaware refer to these advanced precedents
- LLCs and corporations established in Delaware benefit from increased protection from liability and litigation
Aside from the superior court system, corporations and LLCs in Delaware benefit from a highly forgiving tax structure. The state of Delaware imposes no income tax on corporations, even when they do business out of state. Additionally, there are no taxes on stock held by non-Delaware residents and no state sales tax on intangible personal property.
Those who want privacy appreciate the fact that the state of Delaware allows them to register a corporation or LLC without listing the names of the owners. Names and addresses of an LLC’s members will only be made public in the event of court proceedings or when requested by law enforcement.
Startup costs in Delaware are among the lowest in the world, and you don’t even need to live in the state to incorporate a business there. Delaware’s corporate law is among the most flexible in the world, and corporations or LLCs can be owned and operated by a single person.
What if your business doesn’t operate in Delaware? You don’t need to register for a business license there.
It’s no wonder venture capitalists strongly prefer the security, ease, and lower expense of startups registered in the state of Delaware. For more information on this powerful option, call our office to review your individual needs and priorities.