When you incorporate your business, you’ll have two important decisions to make. The first is what type of entity your company will be. The second is where you should incorporate. While you can simply incorporate in your home state, there are several advantages to incorporating in a foreign state like Delaware. Over 1 million business entities are incorporated in Delaware, including more than half of all U.S. publicly-traded companies and 60 percent of Fortune 500 companies.
Here are four reasons to incorporate in Delaware.
The Corporate Case Law
Delaware’s corporation law expertise is widely accepted as a standard by owners of Delaware corporations. Developed over the years by the Delaware Supreme Court and the Court of Chancery, the case law has a long-standing precedent. Judges and lawyers everywhere know and respect the law. As a Delaware LLC, you won’t need to look outside of the state for legal support and guidance. The breadth of precedents set by Delaware cases can be invaluable when deciding whether to settle a dispute or litigate.
Delaware’s highly-respected Court of Chancery, which focuses on corporation law matters, has extensive expertise in resolving complex corporate disputes. Many experienced lawyers recommend incorporating in Delaware because the state courts have developed a substantial body of case law. The national reputation of the Court of Chancery has attracted some of the best lawyers in Delaware to act as chancellors and vice chancellors. While no corporation wants to resort to litigation, you can be assured your case will be handled by a judge who is thoroughly experienced in resolving corporate law disputes.
Flexible Corporate Statute
The Delaware General Corporation Law gives you maximum flexibility in the organization of your business. In Delaware, you can appoint a single person as director, shareholder, and officer of a Delaware corporation; in many other states, at least three people are required for the same positions. Compared to the complex statutes of other states, Delaware’s statute is relatively simple and straight-forward. The law includes several provisions to help you manage your corporation more efficiently. For example, you can have alternate members for your board of directors so your committee can continue to function even if one member is absent.
The Secretary of State’s Office
The Delaware Secretary of State’s Office handles all legal filings and maintains the official records of all Delaware corporations and related entities. The Secretary of State also collects franchise taxes, registers foreign businesses to conduct business in Delaware, and can accept service of process. Turnaround time is excellent; for a rush processing fee, the Delaware Secretary of State’s Office will process your filings within an hour.
When you incorporate in Delaware, you join over 1 million business entities who benefit from Delaware’s incorporation services, including flexible corporate laws, highly-regarded legal and judiciary community, and a customer-focused staff. All of these reasons, and many more, are why you should consider Delaware as the legal home of your business entity. Inc Plan (USA) can help you better understand the process with a free 30 minute consultation.