More than 50% of all U.S. publicly traded companies and 63% of the fortune 500 are incorporated in Delaware. The state’s attractiveness to corporations is largely due to its business-friendly corporate law. These are the top five reasons why.
1. Flexible Laws. Delaware’s General Corporation Law is the most advanced and flexible business formation statute in the United States. It is designed to provide maximum flexibility in the structuring of business entities and the allocation of rights and duties among founders and shareholders.
2. No Juries. If you do end up going to court to settle a dispute, Delaware’s Court of Chancery uses judges instead of juries.
3. Precedence = Less Litigation. Since judges are used, decisions are issued as written opinions that your start up company can rely on. Thus, most Delaware corporations do not end up litigating disputes because their professional advisers examine these published opinions and construct deals to avoid lawsuits.
4. It’s Affordable Delaware charges $89 to incorporate. California ($100), however they nail you for $800 every year in franchise fees, New York ($125), and a significantly cheaper than Texas ($300). Be aware that if you choose to incorporate in a foreign state like Delaware, your start up company may still be subject to registration as a “foreign entity” and compliance with the laws of states you transact business in.
5. Privacy. In a world where personal privacy is constantly eroding, Delaware does not require director or officer names to be listed in the formation documents. Thus, Delaware provides a level of anonymity from snoopers.
For details and instructions on how to open a corporation in Delaware please click on the Delaware state seal in the sidebar. That is a direct link to the State of Delaware website.