Delaware is a serious hotspot for business formation. Over a million business entities have been created in the state, and more than 50 percent of publicly traded companies are legally incorporated in Delaware. What accounts for the state’s popularity among business owners? Several legal and financial factors contribute to its favorable business climate and make it a corporate haven. Let’s look at a few compelling reasons to incorporate an LLC in Delaware.
1. No Residency Requirements
There’s no need to feel like you must form your LLC in your home state when it’s so easy to incorporate in Delaware. Managers and members of a Delaware LLC do not need to be residents of the state or even U.S. citizens. Any individual over the age of 18 may form a Delaware LLC.
2. Favorable Financial Conditions
There are a number of tax benefits associated with Delaware LLCs. The state of Delaware has no sales tax, and the annual franchise tax is low. In addition, a Delaware LLC that doesn’t perform business in the state isn’t subject to the state’s corporate income tax. Due to the favorable financial conditions of the state, many angel investors and venture capitalists gravitate toward Delaware companies.
3. Easy Formation and Maintenance Requirements
Some states require extensive information and charge hefty filing fees, but Delaware makes it easy for businesses to form an LLC. Minimal information is needed to file in Delaware, and the filing fee is small. Even better, there are no voting requirements or mandatory meetings. Maintaining your LLC is just as simple: You just need to submit a simple form and pay a modest fee to keep your Delaware LLC in good standing.
The state of Delaware doesn’t require you to disclose any information about an LLC’s owner in order to form an LLC. All you need is a Delaware Registered Agent and a designated contact person to complete the process. You and your fellow investors can remain anonymous and do not have to be named on public records. This level of privacy makes it difficult for creditors to perform an asset search on the owners of the LLC.
5. Court of Chancery
Unlike other states, Delaware has a separate Court of Chancery which is dedicated to corporate law cases. You don’t have to worry about your case being decided by a jury with little experience in corporate law, and the majority of disputes are handled quickly because they’re backed by over a hundred years of business-friendly established case law.
There’s no doubt that Delaware is a smart place to incorporate your LLC. With its financial benefits and comprehensive legal protection, the state is home to thousands of newly-formed businesses each year. When you establish a business presence, it’s also important to choose the right people to handle your incorporation needs. Let the specialists at Inc. Plan (USA) help you form your LLC or corporation. Contact us today for a Free 30 minute consultation to find out more about our incorporation services.