Why Are So Many Corporations Based in Delaware?

corporations based in delaware

The United States has a long and rich tradition of entrepreneurship. In all 50 states, enterprising individuals have built successful businesses, bestowing upon them fulfilling livelihoods and careers. No matter where you live, if you look hard enough, there are plenty of opportunities for you to create a profitable business venture of your own. If you have spent a fair amount of time in the business world, you probably have a pretty firm grasp on some of the basic principles required for a financially viable business. You understand the importance of budgeting, hiring employees, and knowing your customer. You may have also noticed that a lot of large companies, including the majority of those in the Fortune 500, have offices in the small east coast state of Delaware. So, why are so many corporations based in Delaware, and does incorporating your business in the First State make sense for you?

When the average individual thinks about Delaware, they might think about the origins of America and not much else. Well, in truth, Delaware is a major hub of global commerce, and savvy business owners from around the country opt to base their organizations there. There are a couple of reasons for this. For one, Delaware has favorable corporate tax rates, and it also sits fairly close to New York, Philadelphia, and a number of other large cities. The primary draw for entrepreneurs to Delaware, though, can be attributed to the Chancery Court. As one of the oldest courts in the country, the Chancery Court hears all matters of business law, with cases decided not by juries, but by judges with a unique grasp of the nuances of business. Not surprisingly, this can create a favorable legal climate for business owners.

Corporations Based in Delaware: How is it Done Online?

To start your Delaware corporation, there is a process that you will want to follow. At the outset, you will need to decide on a business name that has not already been registered in the state and features one of Delaware’s required suffixes, e.g. “limited,” “corporation,” etc. You will then need to appoint a registered agent. This individual will be tasked with receiving all legal, tax, and government correspondence on behalf of your business. At that point, you will be able to draft and file your articles of incorporation, which will call for some basic details about your business and its incorporators. 

Corporations typically have to follow stricter rules than, say, limited liability companies (LLCs) or sole proprietorships. The trade-off for that is that a corporation can issue stock, which lets outside investors gain a stake in your business while giving you the cash injection necessary to continue growing your enterprise.

corporations based in delaware

Launch Your Corporation with Our Forms

At Corporation Center, we have all the forms you need to get your Delaware business up and running. To learn more about our services and how we can help you, take a few minutes to explore our website or visit our Frequently Asked Questions page.