When you register a company in Delaware online, there are several benefits, as well as some things to consider. Weighing the pros and cons can help you decide if registering in Delaware is the right choice or not. Statistics show that nearly 68 percent of Fortune 500 companies are registered in Delaware, which proves that there are obvious benefits. Want to know if it’s right for you? Keep reading to find out.
What Does it Mean to Register a Company?
When you register a company, in Delaware or otherwise, you are forming your business as its own entity and making sure that you get the correct and necessary licenses and/or permits that are needed to run the business. There is a process that must be followed, as well as some fees that you may have to pay. Doing so correctly, with our help, can speed up the process and get you ready to open as soon as possible. But is Delaware the right state to do so?
What are the Advantages of Registering in Delaware?
One of the biggest reasons that business owners choose Delaware for registering is because there are tax benefits to take advantage of. The state doesn’t apply income tax to a business that operates outside the state. If you don’t live in Delaware, you won’t have to pay tax on shares in that state. In many industries, Delaware is called a tax haven for these reasons.
Delaware also boasts a corporation court, which allows cases to pass through the system more efficiently, and in some cases, faster. Filing in Delaware also means that you won’t have to disclose who your officers are, nor do officers, directors, or shareholders have to live in the state. Finally, if you’re looking for investors, you may find them more easily if you register in Delaware.
What are the Disadvantages of Registering in Delaware?
Although there are several tax benefits when you register a corporation in Delaware, they often don’t extend to small businesses. That’s because you will still be responsible for paying taxes to the state where your company operates, which doesn’t offer much in the way of savings. At the same time, filing fees are much higher in Delaware than you’ll see in other states. You will also need a registered agent in Delaware to help you file.
While you won’t pay income tax in Delaware, you will still have to pay a franchise tax. This number goes up as the number of shares in the company increases. Finally, you will need to meet the requirements of your home state, regardless of where you register. You’ll be required to submit reports in both states, which creates additional expenses and additional labor.
A business of a decent size may save enough time, money, and hassle when registering in Delaware. However, a company of a smaller size may not benefit to such a degree that it’s worth it. We can help you determine where the best place to register your company is. Contact Corporation Center US to register a company in Delaware online.