incorporate in delaware Where The Law Is Favourable

2007-03-08 10:33:40

( Business )



Because of the federal system the governance and internal structure of business entities is a matter of state law and not national law. So it makes a difference whether you incorporate delaware or incorporate in nevada.

The courts refer to the laws of the state in which the entity was formed rather than to the place where the business is run from. For this reason when businesses form their entity they select a state according to its governing laws, completely independently of the place where the entity operates.

Delaware has long been the choice of both national and international investors to form their business entity because it offers a:
- non-restrictive
- liberal
- legal framework
Which allows entrepreneurs to make the most effective and efficient configuration for their business organization, added to which the laws are always in a state of revision to adapt to new financial and business trends and developments.

When you incorporate in Delaware, the principle that guides Delaware’s laws is freedom of contract. This means:
Businesses can choose different forms of organization
- general partnerships
- limited liability companies
- corporations
- limited partnerships
- registered limited liability partnerships
So that they can best fulfill the needs of their business and the relationships between the management, creditors and owners.

In addition to which, within each organizational form there is a wide choice with regard to the control of financial and governance issues and the allocation of authority.

Incorporate in Delaware is not only attractive because of the flexibility and modernity of its business laws, but also because its judiciary is known to be expert in matters of incorporation and business. The legislature and administration also has a very positive attitude toward innovation and business, its law has a well-established body of precedent and is well-known both nationally and internationally. Generally these factors make Delaware’s legal system the best for business nationally.

Their corporation law provides a framework for the formation of corporations in Delaware, the relationship between the corporation and stockholders and the structure for internal governance.

You can incorporate in Delaware for any lawful activity (unless prohibited by Delaware’s constitution).

A corporation consists of:
- stockholders
- creditors
- officials and directors.

Stockholders – own the enterprise.
Directors – decide on management policy.
Officers – see to the daily running of the corporation.

Under Delaware’s corporation law it is also possible to form a non-stock membership corporation for the purpose of profit.

Usually the same laws govern these organizations as the normal stock corporations, but there are also certain important differences.

Delaware’s law also allows you to form a close corporation which is restricted as to the number of stockholders.


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