By Bryan Orr
When it was time to incorporate my business as a C-corp, I did the process in my home state of Florida. When I spoke to a startup attorney the first question he asked was, “Where are you incorporated?” When I told him Florida he responded with, “Why did you do THAT?” Well, I guess I just didn’t do my research. I naturally assumed that if you do business in Florida, you incorporate in Florida. I went through the process, paid the fees, and got it done.
I came to find out that it wasn’t the best option in my case and I could’ve “taken my business elsewhere.” There are some advantageous reasons to do so, and you may want to consider Foreign Qualification for your corporation.
The legalities of business can be intimidating and sometimes difficult for business owners to understand and really dig into, so whenever I come across a legal process that can be simplified and save me money, I jump on it. Unfortunately, I came across the benefit of incorporating my business in Delaware vs. my home state after the fact. But if you’ve yet to incorporate, here are a few things you should know about incorporating in Delaware.
1. You Don’t Need to Travel to Delaware
You can form a Delaware LLC or Corporation by Internet, fax, or mail WITHOUT EVER GOING TO DELAWARE. Delaware Business Incorporators (DBIs) can electronically register your new Corporation or LLC in Delaware within as little as an hour from receipt of your Internet order.
2. You Do Need a Delaware Registered Agent
All you need to form a corporation in Delaware is a Delaware Registered Agent. With DBI as your Delaware Registered Agent, your Delaware Corporation or LLC may be headquartered in any state or territory of the United States – or in any country in the world.
3. Delaware Provides a Favorable Tax Climate
Delaware is widely regarded by international entrepreneurs and investors as a favorable tax climate. Just to name a few reasons why:
- If you’re selling goods/products to customers in Delaware, Delaware does not have sales tax, thus you would not need to collect that tax from your customer/consumer.
- There is no state corporate income tax in Delaware on goods or services provided by Delaware corporations operating outside of Delaware.
- There are no Delaware capital shares or stock transfer taxes
4. Delaware Has Loose Requirements for Corporate Meetings
Under Delaware corporate law, quarterly or annual meetings may be held anywhere or if you prefer, meetings may be held entirely online, at the option of the board. In lieu of such formal meetings, director(s) and/or shareholders may act “by unanimous consent.” Delaware Limited Liability Companies are not required to hold annual meetings.
There are many other advantages to Delaware being the place to incorporate your business, and I encourage you to check them out to see why Delaware is the corporate capital of the world. Make sure to talk to an attorney directly for advice that is most relevant for your businesses.