Why inc in delaware

Filings are processed quickly. Because Delaware is committed to being corporation-friendly, they will process your filing the same day. Privacy is protected. When you file in Delaware, you don't need to disclose your directors' and officers' names to the state. This allows for anonymity. Residency is not required. Officers, directors, and shareholders don't need to be residents of Delaware.

You can have a slimmed-down corporate structure. Delaware law allows just one person to hold the role of officer, director, and shareholder, which is attractive to small businesses. Investors prefer Delaware. If you're going to look for angel investors or venture capital, know that most of these prefer you incorporate in Delaware.

Disadvantages of Registering in Delaware While Delaware offers distinct benefits, there are also significant drawbacks to incorporating there. Here are other factors to consider: There are no real tax savings for small businesses.

Although Delaware doesn't tax companies incorporated in the state that don't do business there, your home state will tax your company, so you do not avoid taxation. Filing is more expensive. Delaware's filing fees are significantly higher than other states'. You will pay a franchise tax. Although your company won't pay income tax in Delaware, it will have to pay the Delaware franchise tax based on the shares' value.

This is generally minimal for small businesses, but it will increase as the number of shares increases, and as your share value goes up. You may also need to pay a franchise tax in your home state. You must meet your own state's requirements. Even though you incorporate in Delaware, you still need to meet your state's filing and licensing requirements for conducting business there.

You also have to file annual reports in both locations. It's twice the work and twice the expense to do this. A Delaware registered agent is required. When you file, you'll need to provide your registered agent's name within Delaware, a person or company located in-state, who can accept legal filings on your behalf.

If you hire someone to handle this, it's an additional cost for your business. Legal disputes require travel. Because cases involving your company must be heard in the Delaware court, you'll need to travel to Delaware to handle any legal disputes.

Here are just a few of the many reasons people choose to incorporate a Delaware corporation or form a Delaware LLC:. Incorporating in Delaware means that your company has access to the best legal system in the country. Delaware is home to many large corporations, and it can even be beneficial to you with a small corporation. The majority of Fortune companies—66 percent, to be exact—are incorporated in Delaware, although very few have offices in Delaware.

So many corporations are formed in Delaware that there is nearly a one-to-one ratio of corporations to state residents. About 75 percent of the total number of Delaware companies incorporated in the state are LLCs. In law school, when students learn corporate law, they learn Delaware corporate law. Delaware LLC law is also based on contract and allows for the members to organize their company as they see fit without unfavorable rigid default rules that cannot be contracted around found in most other states.

Delaware is the gold standard for organizing and governing the internal affairs of your company to shield your personal assets from potential business creditors. The process of incorporating in Delaware is simple, and nearly anyone can register their company in the state. With the help of a Delaware registered agent such as IncNow, you can create your company by filing out a simple form. The process to incorporate your business in Delaware is easy with IncNow.

The process specifically involves completing an order form on IncNow. Instead, Delaware corporations can expect their legal disputes to be addressed promptly and expertly by judges who specialize in corporate law. Part of the bi-partisan political consensus in Delaware is to appoint and confirm the best qualified corporate law experts to the Court of Chancery.

And part of the legal culture in Delaware is to honor appointment to the Court of Chancery as the highest and most respected form of public service. Other states can, and some have tried, to create similar courts dedicated to resolving corporate disputes.

They, too, can resolve to appoint only their best legal experts to these courts. Chandler, III, has announced his retirement from the court after 22 years. During his tenure he presided over many high-profile corporate disputes involving such big-name companies as Disney, Yahoo, Microsoft, Dow Chemical, and Hewlett-Packard.