The Lure of Delaware

Many large public corporations choose to incorporate their businesses in the state of Delaware. Traditionally, Delaware's corporation laws have been seen as friendly to business -- in the form of a business-friendly state corporations code, low costs of incorporation, lenient information disclosure requirements, and corporation-friendly income tax laws for corporations operating in the state.

For smaller corporations, balancing against these positive factors is the simple fact that, unless your corporation is physically located in Delaware, it will still need to register for operation (and likely pay income taxes) in your home state. The additional cost and time required to do so will likely negate any benefit that your small business might gain from incorporating in Delaware. In addition, recent trends have seen many states altering their laws to appeal to businesses, so in the near future corporation-friendly laws like those in Delaware may become more the rule rather than the exception nationwide.

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Deciding where to incorporate and initiating the incorporation process are important steps on your business's path to success. To ensure that your new business complies with your state's legal requirements at every stage in the corporate formation process, you may wish to consult an experienced business attorney. Click here to learn more.