Saturday, December 28, 2002

why Delaware?

I am frequently asked why more than half of the Fortune 500 companies have made the choice to incorporate in Delaware. Why Delaware? What is so special about Delaware?

Delaware has developed a public-private partnership between the Delaware Secretary of State – Division of Corporations, Delaware’s Attorneys, and the private Registered Agent firms. This partnership involves a highly integrated system of cooperation which takes the best of each participant. From the Government, we contribute stability, impartiality, and the strength of the State.

Delaware Attorneys contribute legal analysis and drafting so as to keep the laws up to date and accurate. The private Registered Agent firms inject a no-nonsense business analysis and application to the equation to make sure things actually work. The Registered Agent firms are in daily contact with the Division of Corporations, and many of them can actually enter and read the incorporation data directly onto and from the Division’s computer system via dedicated direct line networking.

We have formal meetings, quarterly and annually, so as to keep everyone in the industry fully abreast of the pulse of the Delaware incorporation process and the changes we are consistently implementing. And as in business, if something needs immediate action it happens in Delaware. This process has the full support of the Delaware Legislature, as it is in a large part responsible for Delaware’s ability to avoid a State sales tax.

The public-private partnership is really the key to how Delaware stays in the forefront of this industry. The resulting laws and structures that fine tune the incorporation and corporate litigation arenas trim the fat, costs, and delays that you will find in other States.

Here is an excerpt from the Division of Corporation’s site as to how this trimming makes Delaware a lean, mean, corporate machine:

Businesses choose Delaware not for one single reason, but because we provide a complete package of incorporations services including:
Modern and flexible corporate laws;

Our highly-respected business court, known in Delaware as the Chancery Court, which has written much of the modern business case law;

A state government that is business-friendly and accessible;

The expertise of Delaware's corporate and legal service providers; and

The customer service oriented staff of the Delaware Division of Corporations.

The Division of Corporations has Specialists in each section to answer any questions or assist you in filing your corporate, tax and UCC documents. You may also file annual tax payments and UCC documents online through our e-Corp Internet filing system.
So, there is no one “holy grail” answer to the question, why Delaware, unless it is that we have a comprehensive and detailed system for managing it efficiently.

Oh, and did I mention? It’s less expensive.

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