Delaware, the second smallest state in the United States, is the home of
nearly 60 percent of all Fortune 500 firms. Many international companies
interested in doing business in the United States and in other jurisdictions
worldwide choose Delaware because of its favorable corporate law structure,
stability, and reputation as the “American Corporate State.”
Delaware’s advantages as a place of business entity formation range from the
sophistication of its laws to the ease of administration flexibility built into
the corporate formation process. There are many good reasons to form a Limited
Liability Company (or “LLC”) in Delaware:
-
Delaware has maintained a preeminent position with its Limited Liability
Company statute.
-
Delaware law does not require that the name of any member of the LLC be
disclosed in the certificate of formation.
-
One individual can form an LLC and manage the LLC on his or her own.
-
A Delaware limited liability company agreement may contain provisions
which deny voting rights to some members or classes of members.
-
Delaware does not impose any income tax on LLC’s that do not transact
business in Delaware.
-
Delaware permits terms in the limited liability company agreement which
will exculpate managers, members, agent and employees from personal
liability for management of the company. It also permits indemnification of
any person by the company.
-
There is no minimum capital investment required to incorporate a
corporation or LLC in Delaware.
-
Neither members nor managers need to be US citizens.
-
Delaware repealed its inheritance tax entirely in 1999; accordingly,
there would not be inheritance tax on shares of stock held by any person.
Under Delaware law, an LLC is not limited in the amount which may be
distributed to members from time to time, provided that the distribution is
no fraudulent to creditors.
-
A Delaware LLC may be converted easily into a corporation or other form
of entity if necessary, or easily merged with any other form of entity if
necessary.
-
The Delaware Court of Chancery is internationally renowned for its
expertise in decisions relating to business law matters.
-
Delaware follows U.S. federal law of taxation.
-
Delaware charges very low minimum annual taxes (currently $100) for LLCs
as compared to many other states.
