State of Delaware
A US tax exempt state for non-US residents
With a land area of only 1,982 square miles (5,133 sq. km), State of Delaware ranks 49th in land area among the 50 states. Delaware is the fourth least populated state with 706,000 residents. Two-thirds of the State’s population resides in New Castle County, the northernmost of the State’s three counties. Kent County and Sussex County each has a population of approximately 110,000 residents. All of the cities and towns in the State are independent, incorporated municipalities. There are three major cities in the State: Wilmington, with a population of 72,000; Dover, the State capital, with a population of 28,000; and Newark, the site of the University of Delaware, with 25,000 residents.
Delaware is also well served by air transportation. Delaware’s network of public and private airports can readily accommodate commercial and corporate aircraft.
The Port of Wilmington offers potential savings over neighbouring ports because of reduced vessel transit time to and from the Atlantic Ocean, high labour productivity and economical handling rates. The Port has ready access to Interstate 495, connecting it to major east-west and north-south interstate arteries. Rail access to the Port is available by Conrail and the Chessie System, with railcar loading docks located next to every terminal warehouse.
Delaware is also served by the mainlines of the Conrail and CSX railroads. Conrail’s north-south route through Delaware facilitates fast through service to the vital northeast corridor and connections with CSX. Most of Delaware’s plant sites are adjacent to rail lines or have rail sidings at the plant location. Rail sidings are easily obtainable in Delaware, as compared to other states in the region, due to the lack of rail congestion. In addition to major carriers, Delaware is also served by a number of short-line railroads.
Led by the chemical and automotive industries, manufacturing is the largest source of State income, closely followed by financial services that, with other elements of our service economy, are increasingly important. These industries figure most prominently in the industrialized and commercial northern third of the State. In the southern two-thirds of the State, agriculture is a more vital part of the economy. The poultry industry, corn, soybeans and diary products contribute significantly to farm income. One-half of the State’s land acreage is used for farming.
Delaware actively seeks and encourages enterprise and investment. To this end, Delaware has evolved the most modern and flexible business organization laws in the United States, has adopted modern banking and consumer credit laws and has reduced personal income taxes and established a nationwide reputation for innovative tax structure.
Advantages and disadvantages of forming a Delaware company
Why incorporate in Delaware?
Register and form company to get the best tax breaks in Delaware. Get the significant information and all the help on this process. We have everything you need to know about registering and forming the company.
Foreign businesses seeking to enter or expand in the American marketplace can use their location in Delaware to accomplish their objectives. Delaware’s strategic location permits easy access to the United States marketplace, the largest in the world. International business can easily incorporate in the state through the Department of State, Division of Corporations. Citizens and residents of other countries may incorporate in the United States through the standard incorporation procedures set forth by each state. The main benefit of incorporation is that your personal assets are protected from civil liability for acts of the corporation. Your company must have a physical place of business and agent for service in the state in which you incorporate. If you do not wish to open an actual office for your business, you can often use Our Firm as your Registered Agent and Registered Office provider.
Incorporation or formation of a limited liability company also allows you to take advantage of the statutory and judicial laws of Delaware, to help you plan how your business runs. Delaware is known as a business-friendly state and is a good choice if you intend to “go public”. Delaware has many advantages, including very low incorporation and LLC formation fees, low annual franchise taxes, and no state corporate income tax for companies that operate outside Delaware. Delaware maintains a separate “Chancery Court” specifically for business disputes, known for its well-established record of decisions and speed. Delaware’s court system helps business owners spend more time running the business and less time in court. Delaware companies may need to qualify or register to do business in their local jurisdiction, requiring an additional fee to the state where the business is operated.
One person or corporate entity can form an LLC in Delaware. One person or corporate entity can be the President, Secretary, and Treasurer and sole Director of a Delaware corporation, without disclosing the name or names in the Certificate of Incorporation. The director or directors are allowed to amend the By-Laws of the corporation. One person or corporate entity can be the owner and managing member of an LLC. Delaware has no minimum capital requirement to incorporate or form an LLC. Delaware Corporations and LLC’s can qualify to do business in all 50 states and foreign countries.
Start of run a business in Delaware
Main top 10 advantages
Delaware is considered the most attractive state in the nation for organizing.
Delaware courts have a reputation of reaching reasonable and fair conclusions when construing the corporation laws.
The Serial LLC allows different lines of business to be treated separately from each other from a liability standpoint. So, for example, an LLC that owns several apartment buildings may insulate the LLC from liability for each individual building, if the operating agreement allows for it, and the operating agreement is followed. For more information take a look at the Limited Liability Company Act of the Delaware Code (especially, Title 6, Section 18-215; Series of members, managers or Limited Liability Company interests).
We can incorporate or register a Delaware Limited Liability Company (LLC) as well as a Limited Partnership (LP) or Limited Liability Partnership (LLP).
Forming a Limited Liability Company
Relevant information for an LLC in Delaware
- State law reference – Delaware Code Annotated, Section 18-101
- Title of filing – Certificate of Formation.
- Delaware company name requirements – The official name must contain the words “Limited Liability Company” or the abbreviation “LLC.”
- Organizer requirements – a Limited Liability Company may be organized by one person. The organizer need not be a natural person, nor a member.
- Certificate of formation requirements – Certificates of Formation must contain the following: (1) name of company, (2) duration of company, if less than perpetual, (3) registered agent name and registered office address, and (4) any additional matters. Past and future contributions and the Limited Liability Company’s power to avoid dissolution need not be stated.
Annual report requirement
- Annual report requirement – Yes, to Department of State.
- Publication requirement – No
- Effective date of Limited Liability Company organization – On the date of official approval of Certificate of Formation, the company becomes a legal entity and the members are shielded from personal liability.
- Membership requirements – Minimum number of members required is one. The member may be a natural person or a business entity.
Transferability of interest
Unless provided otherwise in the Limited Liability Company Agreement, there is no free transferability of a member’s Limited Liability Company interests. Transfers of interests must be approved by unanimous vote of all members. (Section 18-702(a)). Continuity of company: unless provided otherwise in the Certificate of Formation or Limited Liability Company Agreement, a member’s withdrawal has no effect on the continuity of the Limited Liability Company.
Unless provided otherwise in the Certificate of Formation or Limited Liability Company Agreement, a Limited Liability Company is managed by its members. Operating Agreement Requirements: Delaware law refers to Operating Agreements as “Limited Liability Company Agreements” and they govern the rights, duties, and obligations of the members. They must be in writing.
Multiple member limited liability companies are treated as partnerships for federal tax purposes. Single member limited liability companies are reported on the owner’s federal tax return as a disregarded entity, in effect treated as a sole proprietorship (Federal Internal Revenue Code Section 701).
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