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Why Choose Delaware as Your Corporate Home?

Jay Stockman -- What state Incorporates more than a half-million business entities, including more than half of the Fortune 500 companies? New York? California? Illinois? No. No. No. That state is Delaware.

With a population smaller than 88% of all states, this business-friendly state attracts more corporations than any of the major cities. Businesses choose Delaware simply because of its flexible corporate laws, highly respected Court of Chancery, a business-friendly State Government, and a customer service oriented Staff of the Delaware Division of Corporations.

Among the many business-friendly laws, Delaware does not require corporations to operate in the state, only to maintain a registered agent, who may be an individual resident, or an existing domestic corporation.

Additionally, incorporations typically take 24 hours to process; however there are services that allow same day, and 2-hour filing. There is no corporate income tax for corporations incorporated in Delaware but not transacting business in the state.

Further, the cost to incorporate is one of the lowest in the country, and one person can hold all officer positions of the corporation. Officer names are not required to be listed in the articles of incorporation. Shares of stock owned by persons outside of Delaware are not subject to Delaware taxes.

Delaware maintains a separate corporate court system, called the Delaware Court of Chancery, that does not use juries but only judges appointed for their expertise in corporate law.

The Delaware Court of Chancery is a 210 year-old business court that has written most of the modern U.S. corporation case law. It is widely recognized as the nation's most distinguished agency for dispute resolution involving corporate litigation. The state legislature takes seriously its role in keeping the corporation statute, and other business laws current. Their unique expertise in, and exposure to, issues of business law are supreme. Currently the Court of Chancery has made docket information and pleadings available over the Internet for civil actions filed in the Court.

Delaware's State Government is business-friendly and accessible. The Division of Corporation is in the forefront of efficiency, and their professional staff provides prompt, friendly services to clients, attorneys, registered agents, and others. The office of the Secretary of State operates more like a business rather than a government bureaucracy with its leading edge technology and customer-service oriented staff.

Delaware may make sense for large corporations. However, it may not be worth the effort for small, privately-held corporations who do business in their home state. Although Delaware does not tax out-of-state businesses, taxes must be paid in the state the business is operating. While incorporating fees are lowest in Delaware, appointing a corporate agent to receive official notices in Delaware may negate any realized costs savings.

Nonetheless, all factors considered, Delaware is a premiere legal home to companies all around the world.

Dr. Jay B. Stockman is a contributing editor for Online Small Business Consulting. Visit for more information. He also has extensive experience with Personal Injury cases and is a contributing editor for Personal Injury Online.

© 2006 Jay B. Stockman

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