As an entrepreneur or a beginning business, you may want to know why incorporate in Delaware. What is so special about Delaware? I am here to answer any legal questions along these lines. Email me at sam@molleilaw.com with your concerns and inquiries.
Before you contact me, read the following information to get a better idea of why Delaware is the main hub of corporate activity. The state offers a number of advantages that beginning businesses may not want to overlook.
Below, you can get a better idea of why incorporating in Delaware may be a good idea.
Why Incorporate in Delaware when I’m Based in Another State?
You may be wondering, “Why incorporate in Delaware when I’m based in another state?” That is a good question. Most legal specialists will tell you that Delaware is the best state for a start-up to incorporate because its legislation favors corporate structures.
A Good Base to Begin
Delaware offers a consistent legal system to follow and its tax laws favor companies that do not do business in the state. If you are a non-resident business that wishes to expand in the US, Delaware provides a good base to start.
Attracting the Interest of Investors
If you wish to attract financial interest from angels, private equity firms, and venture capitalists, you should seriously consider incorporating in Delaware.
Most investors like investing in a Delaware C corporation, so you will do yourself a favor, at least from a financial standpoint, if you choose this type of incorporation.
Contact Me for Further Help
Again, you need to contact me at sam@mollaeilaw.com to find out how you can benefit from making this type of move. Delaware’s laws regarding management and securities fit nicely with what professional investors seek.
Even if you choose to launch an LLC in Delaware, you can readily change your LLC to a C Corp for IRS and state tax filing purposes.
Gain an Advantage When Receiving Legal Help
If you incorporate in Delaware, you can more easily do business legally. Because Delaware earns a large portion of its state budget from incorporation, the state maintains an interest in regularly updating its legislation.
Disputes Are Settled More Easily
Because companies that are incorporated in Delaware use the state’s Court of Chancery to settle disputes, they get a resolution that is more satisfactory. That is because the judges have a broad knowledge of the state’s business laws.
Tax Savings Galore!
If you wonder why incorporate in Delaware, the main reason is the taxes or the savings you will reap. For example, incorporation offers the following:
- No payment of state income tax for Delaware companies that operate out of Delaware’s jurisdiction.
- No inheritance tax on any stock held by Delaware non-residents.
- No state sales tax on intangible property.
- Shares of stock, owned by non-residents, are not taxed.
Do You Own a Mobile or Virtual Company?
If you own a virtual company or one that is mobile, you will like forming your company in Delaware. Usually, you will be doing business worldwide. Therefore, forming a Delaware corporation makes a lot of sense.
Not only do you experience fewer entanglements, such as complicated franchise tax reports, but you can also register or unregister your company from other states, as required.
Why Incorporate in Delaware – Why Is the State Better for Filing?
If you want to know why to incorporate in Delaware, you may already assume that filing is easier. If so, you are right.
Delaware offers a number of reasons to file – quickly. You can choose standard filing, 24-hour filing, same-day filing, and even two-hour or half-hour filings. Plus, you won’t have to pay extra for standard service.
Choose 24-hour Filing when You File
Most companies like to choose 24-hour filing, as they can process the order the same day. The Secretary of State’s office confirms the filing 24 hours after its receipt. If you choose a quicker filing method, it is usually because you are facing a dire emergency.
What Do You Think – Why Incorporate in Delaware?
If you still wonder, why incorporate in Delaware, I can share more benefits. You just need to make sure that this type of incorporation will work for your particular business.
As an overview, your decision to incorporate in Delaware must be based on what you seek as a company. What are your ultimate goals? Every start-up has different aspirations.
That is where I can help. Email me at sam@mollaeilaw.com so we can determine if Delaware is the right venue for incorporation.
Other Possibilities
After all, you may find advantages incorporating in Nevada or Wyoming – highly desirable for start-up companies as well.
The Advantages – Once More
To review the benefits, Delaware offers the following advantages:
- The state’s business law is one of the most flexible in the US.
- The Delaware Court of Chancery concentrates on business law and uses a judge instead of a jury to decide business disputes.
- You don’t have to pay state corporate tax. However, there is a franchise tax.
- If your capitalization structure is complex, taxation is often favorable. The same can be said if your company owns a large number of shares of stock.
- Non-residents do not have to pay a personal income tax.
- Shareholders, officers, and directors of corporations do not have to be Delaware residents. The same can be said for members or owners of LLCs.
- Any stock shares owned by non-residents are not subject to state taxes.
What To Do Next
If you wish to gain interest from investors and enjoy more operating flexibility, you will do yourself a favor by incorporating in Delaware. I can go over the benefits and drawbacks with you for your start-up.
By knowing the laws of places, such as Delaware, Wyoming, and Nevada, you can find just the right base for your start-up or enterprise.
Again, I can help you with your decision to incorporate it. You have to carefully contemplate the advantages and disadvantages of making this type of move. I will support your operations and give you sound legal advice along these lines.
Let’s start the process today. Contact me at sam@mollaeilaw.com for further details and for incorporation information.
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