Congratulations, you’ve formed a Delaware corporation. As I’ve documented elsewhere, you’re probably paying more for a Delaware corporation than you would have if you incorporated in your home state. So, what are doing to make sure you get full benefit of that choice? Recall that many corporations incorporate in Delaware partially because of the Delaware Court of Chancery, which handles matters related to its corporate law. The Court’s judges (called “Chancellors” in Delaware) are well [...]
Received an absolutely ginormous Delaware franchise tax bill in the past few weeks? Corporate lawyers all across the country are getting phone calls from anxious clients wondering why their startup company now owes Delaware tens of thousands of dollars — sometimes more than their entire company has in the bank. Take a deep breath — chances are that you don’t owe anywhere close to that much. There are two ways to compute franchise taxes, and [...]
Money: it’s why people start businesses (to make money) and form corporations (to protect their own money). Yet, for some reason, the issue of money often doesn’t enter into the equation when deciding where to form a new company. For early-stage companies, it should. Here’s a little comparison of the various costs of incorporating in North Carolina and Delaware for a company that will be conducting all of its business in North Carolina, and running [...]
The quality of the Delaware Secretary of State’s office is often given as a reason to choose Delaware as a corporation’s home state. But, how does Delaware’s Secretary of State stack up against North Carolina’s? Every state has some agency that’s responsible for creating new business entities, recording their filings, and making that information available to the public. Among other things, that agency checks corporate charters to make sure they meet the legal standard [...]
We corporate lawyers have a standard list of reasons why companies should incorporate in Delaware instead of another state. I thought I’d look at some ways that those reasons don’t actually play out how we think it should. One of those reasons is the Delaware Court of Chancery, which hears cases about the internal affairs of Delaware corporations. The Court of Chancery is extremely well respected — its judges are considered global experts in corporate [...]