Deciding Where to Incorporate
The first basic decision a business should make, after deciding to incorporate, is to select the optimal State of incorporation. A business is not required to incorporate in the State of its operations. However, the decision to incorporate in the home State of operations may be the best choice.
Two issues need to be considered when selecting the optimal State of incorporation. First, a financial analysis is in order. Compare the costs of incorporating in the State of operations versus qualifying to do business as a foreign corporation operating there. Second, consider the advantages and disadvantages of each State’s corporate laws and tax structure. The decision usually falls between the State in which the business operates or the many advantages inherent with the Delaware General Corporation Law. Often, Delaware’s Chancery Court system becomes the deciding factor. Also, Delaware’s court system is very business-friendly.
If you have any questions on where to incorporate, please call our office. We may be able to assist in making an informed decision.
Incorporating in Delaware
Delaware leads the nation as the major corporate domicile for American and International corporations. More than 850,000 business entities have their legal home in Delaware, including more than half of all U.S. publicly-traded companies and 63% of the Fortune 500.
Many companies active in the world economy of the new millennium are discovering the advantages of incorporating their business activities. These advantages include greater liability protection, corporate deductions, and privacy. Unfortunately, corporate law varies widely throughout the United States.
There are a number of reasons why so many companies incorporate in Delaware. First, they include the Delaware General Corporation Law which is one of the most advanced and flexible in the nation. Second, Delaware courts and in particular, the Court of Chancery, have over 200 years of legal precedent as a maker of corporation law. Third, the State legislature takes its role seriously in keeping the corporation status and other business laws current. Lastly, the office of the Secretary of State operates much like a business, rather than a government bureaucracy, with its modern computer imaging and customer service oriented staff.