35 Reasons to Incorporate in Delaware...
1. You can form a Delaware Corporation by FAX, MAIL or INTERNET without ever coming to Delaware by using the services of a Delaware Registered Agent such as DELAWARE BUSINESS INCORPORATORS, INC.DBI can electronically file your incorporation, usually within 24 hours following payment and receipt of the signed order form.
2. The Delaware corporate franchise tax is minimal and quite competitive with other states (only $30/year for Delaware corporations with 3,000 shares or less). There is an additional $20 filing fee. All fees charged by the State of Delaware to corporations are kept deliberately low to attract incorporation business – a major source of revenue for the State.
3. One single individual may simultaneously hold all of the executive offices and titles of a Delaware corporation, including: chairman of the board, president, vice president, secretary and treasurer. Unlike states that require as many as three different individuals to hold the posts of officers and/or directors, Delaware permits you to be a one-person corporation.
4. A Delaware director shield law permits Delaware corporations to shelter their directors, liberally, from personal liability in connection with their actions as board members.
5. Delaware permits S corporations, which, with the federal tax laws of 1986, can be very advantageous.
6. As of October 1, 1992, Delaware recognizes Limited Liability Companies (LLCs), and you may form an LLC in Delaware. LLCs combine the best aspects of the corporation and the limited partnership. This form of organization protects individuals from liability (as does a corporation) and allows the participant to write off losses and actualize gains (as does a limited partnership). LLCs do not have as many restrictions as S corporations.
7. Delaware has a separate court system – the Court of Chancery – to adjudicate corporate litigation plus a fully established corpus of case law and a very capable corporate Bar. Delaware’s Court of Chancery, an equity court of limited jurisdiction, has, for several decades, been deciding corporate disputes involving many of the largest corporations in the world. In the process, it has developed an expertise in corporate law and a body of legal precedent which are respected and referred to by courts all around the country. Delaware’s Court of Chancery is one of the most important corporate law courts in the country, second only to the Supreme Court of the United States in its impact on corporate law. Delaware’s corporate laws are regularly reviewed, revised and simplified by the Delaware State Bar Association and the Delaware Legislature. Their goal is to provide a corporate legal climate conducive to the growth and profitability of the more than 356,407 companies chartered as Delaware corporations. Delaware’s Court of Chancery celebrated 200 years of existence in 1992. Delaware was already perfecting its body of corporate law when all of the country west of the Mississippi was still “Native American Territory” or was owned or claimed by Britain, France, Spain or Mexico!
8. There is no minimum capital investment required to form a Delaware corporation. Your investment may be as low as zero.
9. You may operate anonymously as the owner of your Delaware corporation if you wish – never revealing your identity to the State of Delaware.
10. You do not have to be a U.S. citizen or resident of the USA to set up a regular “C” (the standard, stock) corporation or Limited Liability Company (LLC) in Delaware. Resident non-U.S. citizens may form S corporations.
11. Your Delaware corporation may be based, headquartered and/or operated in any state or territory of the United States – or in any city in any country in the world – providing that you retain the services of a Delaware Registered Agent such as DBI.
12. Delaware has a highly specialized and expert corporate bar that is very familiar with Delaware corporate law and which appears regularly before judges of the Court of Chancery.
13. The Delaware Division of Corporations is the “leader” in providing service based on its many years experience.
14. There is no sales tax in Delaware. Whether your corporation is physically located in Delaware or not, as a Delaware corporation, your purchases in Delaware are not subject to sales tax.
15. There is no state corporate income tax in Delaware on goods or services provided by Delaware corporations operating outside of Delaware.
16. There is no state corporate tax on interest or other investment income in Delaware, when earned by a Delaware holding company.
17. Delaware has no personal property tax. There are no State real property taxes, and the local real property taxes are very low.
18. Delaware has no ad-valorem or value-added taxes (VATs).
19. Delaware has no taxes on business transactions (TBTs), which are essentially VATs that exempt retailers.
20. Delaware has no use tax, inventory or unitary tax.
21. There is no State of Delaware inheritance tax on stock of Delaware corporations operating outside of Delaware held by non-residents of Delaware.
22. There are no Delaware capital shares or stock transfer taxes.
23. Wilmington, Delaware, has no city sales tax.
24. Delaware corporations are permitted, under appropriate circumstances, to pay dividends out of net profits if there is no surplus.
25. The director(s) of a Delaware corporation are permitted to set the sales price on any stock the corporation issues and desires to sell.
26. Delaware corporations may purchase shares of their own stock, hold, sell and transfer them.
27. The director(s) of Delaware corporations may determine what percentage of the consideration received from the issue of their stock is to be considered capital. This is important because it gives the directors greater flexibility regarding the use of funds obtained in a public offering, so that large amounts are not tied up in the capital account.
28. The liability of a shareholder of a Delaware corporation is limited by the amount of his investment in the corporation plus the corporate tax liability – provided that the corporation has conducted its business according to all applicable state and federal laws.
29. Your Delaware corporation may own – without limitations as to amount or value – stocks, bonds or securities of other corporations located in Delaware or outside of Delaware as well as real and personal property. This means that your new Delaware corporation can be set up as, or later become, a corporate holding company or real estate holding company.
30. Your Delaware corporation can be set up to be an all-purpose corporation – to conduct multiple types of business, to manufacture and/or market any products, to offer all kinds of services, simultaneously or sequentially. All you have to do is include a broad “statement of purpose” in your Delaware Certificate of Incorporation (Corporate Charter) and other corporate documents such as: “The purpose of this corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.” This permits your Delaware corporation, for example, to start out as a real estate holding company, add your spouse’s retail business to its activities and later become a manufacturer of packaged goods – all without having to alter your original documentation or file new corporate documents.
31. Quarterly or annual meetings may be held anywhere ( including a telephone conference call) at the option of your Delaware corporation’s director(s). In lieu of such formal meetings, director(s) and/or shareholders may act “by unanimous consent.”
32. The bylaws of your Delaware corporation may be formulated or altered anytime by its director(s).
33. Your Delaware corporation will automatically have “perpetual existence” unless otherwise specified in your Delaware Certificate of Incorporation.
34. Your Delaware corporation stock can be privately owned or publicly traded on any stock exchange anywhere in the world when properly registered.
35. You do not have to maintain a Delaware business office address aside from the address of your Delaware Registered Agent which is required for service of process. However, if you would like to have a Delaware business address where you can receive business mail (in addition to service of process), DELAWARE BUSINESS INCORPORATORS, INC. would be happy to provide a good one–ours–as well as your own private phone line and fax number.
