Why Incorporate in Delaware?

Delaware is frequently the state selected by companies wishing to incorporate. There are numerous reasons for this. The following explores some of the major benefits of incorporating in Delaware. Though there are several benefits of incorporating in Delaware, it is not necessarily appropriate or desirable for all companies. Before incorporating your company, it is often beneficial to speak with a business and tax law attorney.

Court of Chancery

Possibly the biggest benefit of incorporating in Delaware is the Court of Chancery. The Court of Chancery is a specialty court for corporate disputes. It is made up of one chancellor and four vice-chancellors, all of whom are nominated by the Governor and confirmed for a 12-year term by the Senate. Disputes brought before the Court of Chancery are decided by a judge, as opposed to a jury, which can be beneficial due to the potentially complex nature of corporate litigation.

The Court of Chancery has developed over 200 years of case history or precedence, which is very helpful for business owners and attorneys as it helps them predict the consequences of specific business decisions if those decisions result in litigation. The legal precedence can also help avoid needing to use the court system because it allows attorneys to see how similar disputes were resolved in the past. By incorporating in Delaware, business owners can receive the benefits of a court that specializes in corporate issues.

Other Benefits of Incorporating in Delaware

Another benefit of incorporating in Delaware is corporate laws that allow for flexibility in operating the company. This includes such laws that allow for single-member Board of Directors and easier handling of complicated mergers and acquisitions. In addition, non-resident corporations and LLCs do not pay state income tax.

It is important to note that a company can incorporate in Delaware even if it does not have an office in the state. Along those same lines, shareholders, directors, or officers of a corporation, as well as members or managers of an LLC, do not need to be Delaware residents to incorporate in the state. As a result of these allowances, it is possible for business owners throughout the country to enjoy the benefits of Delaware incorporation with ease.

Help Incorporating Your Company

For more information on whether incorporating in Delaware is right for your company, you should speak with an experienced business and tax law attorney today. There are many benefits to incorporating in Delaware, but you should not assume that it is the best choice for your company. The Royse Law Firm has successfully helped companies incorporate in Delaware, as well as in California. We look forward to using our experience and knowledge in helping you with the incorporation of your company.

Disclaimer: This blog and website are public sources of general information concerning our firm and its lawyers, as well as the information presented. They are intended, but not promised or guaranteed, to be correct, complete, and up-to-date as of the date posted. This blog and website are not intended to be, and are not, sources of legal opinion or advice. The materials, information, and communications on this blog and website do not apply to any particular person, entity, or situation, and do not apply to you or to your specific situation. You will need to consult with an attorney and/or other appropriate professional about your specific situation. Thank you.
Roger Royse

Roger Royse, the founder of the Royse Law Firm, works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. Roger regularly advises on complex tax structuring, high stakes business negotiations and large international financial transactions. Practicing business and tax law since 1984, Roger’s background includes work with prominent San Francisco Bay area law firms, as well as Milbank, Tweed, Hadley and McCloy in New York City.
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