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Advantages of Incorporating in Delaware
There are more Delaware corporations than corporations in any other state. This is because there are many benefits to incorporating in Delaware, including the points stated below:
- Delaware has no personal property tax, intangible property tax, or sales tax that is levied against Delaware corporations. Better yet, Delaware corporations do not pay state income tax if the Delaware corporations are not doing business in Delaware.
- On a related note, shares of Delaware corporations owned by non-residents are not subject to any Delaware taxes.
- Incorporating in Delaware involves no minimum capital requirement, with many other states requiring at least $1,000 in capital. Thus, Delaware corporations can be formed at a low cost.
- Incorporating in Delaware is an easy process, as the Delaware Corporation Department has developed a customer friendly and easy way for Delaware corporations incorporating in Delaware.
- One person can be the only Officer, Director, and Shareholder for Delaware corporations. No additional people are required to fill the director or officer positions of Delaware corporations. Conversely, many other states require that at least three people fill the positions of officer and director.
- Delaware corporations pay low incorporation costs when incorporating in Delaware. Delaware corporations can be formed without even visiting Delaware and meetings of Delaware corporations can be held anywhere and need not be in Delaware.
- Incorporating in Delaware also has legal advantages, for Delaware corporations receive the benefit of having Delaware's renowned Court of Chancery, a business court system solely specializing in corporate law. Consequently, Delaware corporations can rely upon a well-established body of law, providing predictable legal decisions.
- Delaware corporations provide a major source of revenue to the state, so by incorporating in Delaware you are ensured of a business friendly climate that favors Delaware corporations.
- Delaware corporations pay an annual franchise tax that is amongst the lowest in the nation.
Because of the many advantages of incorporating in Delaware, all business owners should consider this possibility.
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