Many would-be business owners have been able to take the plunge thanks to the security provided by Delaware corporation registrations. Networks also help these businesses develop and diversify more rapidly. This is one of the many reasons companies of all sizes incorporate in Delaware. For a long time, Delaware has been the go-to place for incorporating a business.
The convenience of having a single location to handle a company’s legal needs is only one of many reasons for this. Here are some of how Delaware corporate registrations have paved the way for companies to get started:
No Personal Liability Protection
The fundamental advantage of establishing a company in Delaware is the protection it provides its owners from personal responsibility. Most company owners choose Delaware as their location because of the state’s generous limited liability protections. In the case of a business failure and the company’s inability to pay its obligations, the owner’s assets will not be at risk.
Other than Delaware, Nevada, South Dakota, and Wyoming have limited liability protection for companies. However, unlike Delaware, these states don’t restrict access to libraries and other public resources. As part of its Open Book initiative, the state’s Division of Businesses makes publicly accessible online all of the division’s comprehensive documents about all registered businesses. Records may be searched by name, address, company type, or registration number; any interested party can access the information.
Flexible Shareholder Agreements
The second way that Delaware incorporation has facilitated company expansion is by allowing for more malleable shareholder agreements. Companies that form in Delaware are allowed to engage in shareholder agreements that are both very flexible in terms of the rights and privileges of shareholders and relatively plain and standardized. Delaware corporation registrations give a distinct variety of conventional formulas to pick. Still, this sort of agreement allows corporations to build shareholder agreements uniquely tailored to their requirements.
Delaware corporation registrations have the extra advantage of being both adaptable and well-established. This implies that there will be no need for special training for attorneys who handle corporate transactions or litigation since they will already be acquainted with the language used in these agreements.
Ease of Doing Business through Delaware Corporation Registrations
Delaware is a popular choice for companies setting up shop since the state imposes few limitations on the establishment of corporations and offers basic, easy-to-follow processes.
C-corporations and S-corporations are both valid options for incorporation in Delaware. Distributions to shareholders of a C-corporation are subject to double taxation, first at the corporate level and then again at the individual level. Subchapter S of the Internal Revenue Code governs the taxation of S-corporations, which allows them to avoid paying federal income tax and sometimes even state income tax on their profits. Only wages received by its workers are subject to income tax. Foreign investors without permanent residence status in the US may hold S-corporations but not C-corporations.
Secrecy of Ownership
In the eyes of the law, a corporation is a fiction, a different creature endowed with its own set of rights and responsibilities. No other corporation, limited liability Company, or similar entity may use the same name; hence a term is necessary for that organization. This aids in maintaining a record of who owns what businesses, which should, in principle, discourage individuals from forming many shell corporations to avoid personal liability.
You must register as an owner in the state where you want to do business. However, if you don’t want to, you may avoid disclosing the identities of your real Shareholders and Beneficial Owners. If you’re looking for robust secrecy laws, go as far as Delaware.
Since Delaware has no corporate income tax, your firm will not have to worry about forking over any of its hard-earned cash to the government. Compared to most of the United States, the length of time a corporation may stay in good standing is almost doubled. Seven years instead of three are allotted to sole proprietorships, while limited liability companies (LLCs) get a full fifteen years instead of only eight.
In addition, there are no limits on the number of shareholders or directors a company may have. Delaware’s registration costs are also among the lowest in the US and far lower than any other state.
Although many things are involved in starting a company, when you work with us, you’ll get the Delaware corporate registration professionals you need to make the process as simple as possible. Our friendly staff here at Corporation Center is always happy to help you answer questions and guide you through the process. We’ll take care of all the forms, filing, and paperwork for your company registration so that you can focus on your business. Contact us today to learn how we can help!