Advantages to set up your Business Company in Delaware
Incorporating in Delaware
When launching a business, several crucial decisions lay the base for a successful future, including:
- Should you go for incorporating?
- Which state should you choose for incorporation?
- Which legal entity aligns best with your business objectives?
US Limited Liability Companies (LLCs) have rapidly gained popularity among American and global businesses. US LLCs can be established in any state, yet many entrepreneurs decide for forming an LLC in Delaware, even if they have no intention to operate within the state itself.
Delaware boasts some of the most business-friendly laws in the nation, underpinned by statutes such as the Delaware General Corporation Law and the Limited Liability Company Act. These statutes are consistently updated through collaboration with seasoned corporate lawyers to ensure that Delaware remains a trailblazer in business law.
The primary motivation for incorporating a company in Delaware is to safeguard personal assets, including homes, vehicles, and savings. In the event of litigation or business failure, personal assets generally remain immune from seizure. This level of limited liability is unavailable to sole proprietors or partnerships, where individuals or partners bear personal responsibility for all business debts.
For foreign entrepreneurs and US taxpayers alike, a US-based LLC can offer substantial tax benefits. A Delaware Limited Liability Company (LLC) is a pass-through tax entity, meaning that it is not directly subject to taxation. Instead, business profits and losses flow through to the owners, who report them on their personal tax returns.
A little-known fact is that the United States can serve as a significant tax haven. A US LLC established by a non-US citizen or non-resident can generate income that remains untaxed in the US, provided certain criteria are met to avoid LLC taxes.
In essence, US tax liability applies only when two conditions are met:
You have at least one “dependent agent” in the US, defined as employees or entities working almost exclusively for your business.
This dependent agent significantly contributes to your business within the US, as opposed to performing purely administrative tasks.
If you lack a dependent agent substantially furthering your business in the US and do not maintain a US office, you are not subject to US tax. Even if the LLC generates income in the US, that income remains untaxed in the US
Moreover, if you reside in a country with an applicable tax treaty with the US, you would be exempt from US taxation. Claiming a “permanent establishment” in your home country is possible as you reside in your tax home, thereby circumventing US taxation.
Full Privacy in Delaware LLC Formation
In several states, when forming an LLC, you are obliged to disclose the names and addresses of the members or managers in the formation documents. This information becomes part of the public record, making it easily accessible to anyone interested in your holdings.
However, Delaware does not mandate listing the names and addresses of members or managers in the certificate of formation. In Delaware, an LLC certificate of formation solely requires:
The LLC’s name.
The name and address of the Delaware “registered agent”.
Opting to form a Delaware LLC offers substantial advantages that should be carefully considered when determining where, how, and whether to incorporate.
Delaware’s legal framework and its robust court system create a generally business-friendly legal environment. The combination of these features in Delaware makes it an exceptional choice for business owners.
Ready to establish a Delaware LLC?
TBA offers comprehensive support throughout your business’s growth, from initial formation to ongoing filings and more:
- Formation of LLCs or corporations
- “Registered Agent” services
- Obtaining an Employer Identification Number (EIN)
- Annual reports
- Operating Agreements
- Certified copies of LLC or corporation documents
What distinguishes us from our competitors is that our services extend beyond mere company registration. We provide a wide range of additional services that others either do not offer or provide at higher costs, including lifetime free support.
While most providers focus on personalized consultations at relatively high rates or run bulk registration factories with no support, we aim to offer the advantages of both approaches. TBA combines professional guidance, global registration services, competitive fees, customized order processing, lifetime support, and expedited processing. While other providers may see company formation as bulk registration with no support and no individualized assistance, we prioritize your business’s unique needs.
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Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.