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Business Entity Comparison, C-Corp vs. S-Corp
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Advantages of a Delaware Corporation or Limited Liability Company

Forming a Delaware Corporation or LLC may offer you many advantages.


Whether you are looking for a favorable tax environment, privacy protection or perhaps the ability to protect your directors and officers from personal liability, a Delaware corporation may be the best choice for you.

Delaware has long been known as a premier location for organizing and locating businesses. In 1899, Delaware adopted a general incorporation act aimed at attracting more businesses to the state.  Delaware began to stand out as a corporate haven due to its law which gives significant latitude to corporate management to operate and control the business.

58% of Fortune 500® Companies and 50% of US publicly-traded corporations are Delaware corporations.

Delaware has a separate court system, the Court of Chancery, which is a court of equity vs. a court of law. As a Court of Equity, there are no juries and all cases are heard by judges, called chancellors. Delaware has decades of case law giving additional certainty to company management and their counsel when making business decisions.

 

Advantages of Doing Business in delaware

  • Increased Privacy - Delaware does not require director or officer names (in corporations) or member/manager names (in LLCs) to be listed in the formation documents.
  • Shareholders, directors and officers of a corporation or members or managers of an LLC need not be residents of Delaware
  • Delaware corporations and LLCs need not have an office in Delaware
  • Judges, not juries, preside over the Court of Chancery, an equity court
  • Delaware has a long established corporate law and case history
  • Delaware has favorable tax laws for large companies with large number of shareholders
  • Non resident corporations and LLCs pay no state income tax
  • There is no personal income tax for non-residents
  • There is no state tax on stock owned by non-residents
  • Businesses that do not do business in Delaware pay no sales tax, corporate income tax, or property tax

Consider: The advantages of a Delaware Corporation are numerous, especially for larger corporations.  These advantages revolve around the benefits of the Court of Chancery and shareholder lawsuits.  This can be a tremendous advantage for larger companies.  For smaller companies, especially start up companies not doing business in Delaware, the cost of attending court proceedings in Delaware vs. their home state may be too expensive.

Should you have questions or need additional information about forming a Delaware corporation or LLC , give us a call at 1.877.901.5800 and ask to speak to a client representative.


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