Why do businesses incorporate in Delaware or Nevada?

Why do businesses incorporate in Delaware or Nevada?
FBS no background.png
AAEAAQAAAAAAAAeVAAAAJGU1ZmU1YWRjLTUwZjItNDIyOS1iZmY1LTU1OWQ3Mjk5OGFmNw.jpg

Most do not know that incorporating your business can have different implications depending on where you do it. You can strategically incorporate in different states to take advantage of various state rules. Delaware and Nevada seem to be everyone’s favorites, but why?

 

Delaware

2000px-Seal_of_Delaware.svg.png

It is usually best for large businesses to incorporate here as they are more flexible with them. The state:

  • The business law here is the most flexible in the country, and the Court of Chancery (focusing on the business law) is governed by Judges, not juries. This flexibility can be beneficial in most cases.
  • Delaware does not have state corporate income tax or personal income tax for non-residents.
  • Does not require shareholders, directors and officers to be Delaware residents.
  • Shareholders outside Delaware do not owe the state any taxes.
  • The state DOES, however, have substantial franchise taxes.

These are just a few of the benefits of incorporating in Delaware.

 

Nevada

Nevada-StateSeal.svg.png

 

Nevada started to compete with Delaware with their strategies.

  • Protects against hostile takeovers.
  • Has no corporate income tax, franchise tax or personal income tax.
  • Does not require shareholders, directors and officers to be Nevada residents.

 

Fees between the two differ and these are only a few of the differences between the two. Always consult your lawyers and/or accountants when incorporating your business.

 

SOURCES:http://www.bizfilings.com/learn/incorporate-delaware-nevada.aspx
https://www.rocketlawyer.com/article/incorporating-in-delaware-or-nevada-whats-the-best-option-for-my-business.rl

Sign up for our E-mail list

You’ll get our newsletter containing additional information about how to better your Startup business in areas like Managment, Marketing, Finance, Funding, Time-Management, Leadership and more. We are here to help!

Thank you for taking the time to read this post. If you enjoyed what you read, please also follow us on our social media accounts: