Features of a Delaware Corporation

2007-03-08 10:33:40

( Business )



Why Incorporate in Delaware?

Almost half a million companies and more than half of the nation's top business firms incorporated in Delaware. This is due to numerous advantages compared to incorporating in other states. Delaware also has one of the most flexible and practical corporate laws, as well as a highly respected and business-friendly government.

Neither you nor your shareholders need to be Delaware residents. You don't need to list your company's shareholders, directors and officers. In fact, you can even use just one or two people to represent all positions in your firm.

Delaware corporation law is also easily interpretable and flexible. Delaware has a Court of Chancery which utilizes merit-based judges instead of juries. Without juries, the judiciary process is much simpler. The Chancery is well known for consistency and efficiency in addressing complex corporation issues.

Cost of incorporating in Delaware is one of the cheapest in the country at under a hundred dollars. The Secretary of State's Office provides fast services, usually within a week after receipt of your filing forms.

Perhaps the biggest advantage for Delaware corporations is that you don't have to file or pay corporate taxes in Delaware as long as you are not conducting your business there.

A Delaware corporation needs to pay an annual franchise tax to the state for the privilege of incorporating. This tax is based on the Delaware corporation's number of shares, and can be as low as under a hundred dollars. This is a small price to pay for all the advantages you will enjoy as a Delaware corporation.

How to File as a Delaware Corporation

You fill out the incorporation forms and submit the articles of incorporation to the Delaware State Department. As mentioned earlier, there is no need to indicate the names of the shareholders, officers or Board of Directors. You just need to make sure that no other company is using the business name you are adopting, and that you end the business name with "Company", "Corporation", or "Incorporated" or any of their abbreviations.

You can even submit the incorporation papers through intermediaries such as a law office or an online site. Online incorporation is generally faster to process.


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