Companies that do not have a physical presence within the US or any other state should look at incorporating in Delaware. This includes foreign companies that are looking to establish a presence in the US, internet companies, and companies that control and sell intellectual property.
Delaware is a great place to incorporate for people looking to find a stable place to conduct business. Unlike many jurisdictions which offer attractive benefits which can be somewhat offset by high country risk, Delaware has fiscally sound policies. The state constitution forces the legislature to pass “balanced budgets” every year. There is no history of asset seizures or dramatic increases in taxes.
Delaware is currently the home of the majority of Fortune 500 companies. Despite its low taxes for individual companies the state still raised $860 million in taxes according to the New York times in 2011. It is not in Delaware’s best interest to make it a less business friendly environment. It is a state where the best interests of corporations and the government coincide.
In addition to its fiscal stability, Delaware has a long history as a corporate haven. Its large body of case law means that many settled precedents exist. A case that is tried in Delaware is unlikely to have any unpleasant surprises. A side benefit of this is that many cases never even have to go to trial. They are settled to the mutual benefit of all parts via arbitration.
In short, the stable fiscal and legal atmosphere of Delaware makes it ideal for both tiny start ups and huge well established corporations. A start up will appreciate the economy and ease of compliance of a Delaware corporation, as well as the legal protection and tax benefits it offers. A massive publicly traded company appreciates that because of the integrity of the Delaware judiciary, a Delaware company, no matter how wealthy, does not have to fear being highjacked in a legal mugging.
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