Incorporate in Delaware

[llcollins82]

Did you know that 60% of Fortune 500 companies incorporate in Delaware to save money and gain tax benefits? What other benefits are there to incorporating out of state?

Check out this blog post for some great reasons to start your own business and find out why so many companies choose to **Spam removed**

[Business Attorney]

The fact that very large companies with very large capitalization and directors who have to answer to a large group of shareholders select Delaware has very little bearing on whether a start-up company should select Delaware for its incorporation. It is a disservice to imply otherwise.

In fact, most small businesses should form their businesses in the state in which they will operate. End of story...

[Evan]

Delaware has a lot of business-friendly regulations that tend to benefit only large corporations, not small mom-and-pop shops.

If you choose to incorporate in Delaware, bare in mind you will have to register as a foreign corporation in your home state, where you will be transacting business. This often subjects you to all the same rules/regulations/taxation/fees that you were looking to avoid.

The average small business should not consider incorporating in another state except where they plan to do business. It's often more costly.

[orion_joel]

I am sure that there is some sort of reasoning behind the method they have used in the US where it is so divided between states. However i like the method used in Australia.

While a business name can be registered with-in any state for sole traders in that state. If you want to register as a corporation it is done at a federal level rather then the state level. I think that this makes it easier to operate, as for a corporation operating in all states there is only a single point and single set of regulations.

Although for smaller business operating in a single state i imagine there would be little difference, for medium to larger companies i could imagine there would be a lot more hassle's although i may be wrong.

[Evan]

There are a lot of reasons why corporations exist solely at the state level, and not at the federal level. Certainly it would be easier, but oh the headaches. On top of that, such a sweeping change wouldn't happen without a lawsuit regarding the constitutionality of such a concept.

[BillR]

There are a lot of reasons why corporations exist solely at the state level, and not at the federal level. Certainly it would be easier, but oh the headaches. On top of that, such a sweeping change wouldn't happen without a lawsuit regarding the constitutionality of such a concept.

And you KNOW the Feds would win with the continued mis-application of the Interstate Commerce Clause

I'm not one of the right wing nutjobs who completely want to get rid of this - but I do think that it has FAR over-reached it's intended boundaries.

[Evan]

I doubt that the argument would prevail, nor would the government proceed with going that route. Lots of reasons, and certainly it could be debated.

[jeffunger]

Delaware has a wonderful benefit for most small businesses - mobility. Forming in Delaware and qualifying to do business in the state where you presently live enables the entrepreneur to move to a new state without being tied to the old state (e.g., obligated to pay franchise taxes and file tax returns) forever. When it's time to move, you can surrender the right to do business wherever you are living and qualify to do business in the new state when you set up shop there.