Delaware has low incorporation fees, low annual franchise taxes and no state corporate income tax for businesses that operate outside the State.
Delaware has an extremely well established body of law; does not seek to tax income earned in other jurisdictions; has an excellent, business court in its Court of Chancery and is very pro-business.
Over 50% of all companies on the NY Stock Exchange are Delaware corporations.
Delaware's corporation law are written to protect the rights of shareholders, this emphasis is placed on shareholder protection attracts the public companies.
There are two types of companies in Delaware:
An LLC is a form of Partnership which has become very popular.
This is different to a Corporation for the following reasons:
Any profits or losses are passed to the members of the LLC to report on their personal income tax. Therefore the LLC does not pay any income taxes.
General procedures after you receive filed Articles of Organisation
LLC's with non-resident shareholders and which conduct no business in the US and which have no US-source income are not subject to US federal income tax and are not required to file a US income tax return.
The LLC is a distinct business entity that offers an alternative to partnerships and corporations by combining the corporate advantages of limited liability with the partnership advantage of pass through taxation.
US limited liability companies that conduct no business in Delaware with non-resident members are generally not subject to state income tax and are not required to file a state income tax return.
LLCs can elect to be taxed like partnerships, only at the individual level when profits are paid as dividends. This yields a considerable advantage over C corporations, which are subject to double taxation - once at the corporate level, and again at the individual level when profits are paid as dividends to the shareholders.
An LLC is owned by its members. An LLC may be managed by its members or by selected a manager.
If an LLC is managed by its members, it operates similar to a partnership. Each member has an equal say in the management of the LLC.
LLCs offer numerous advantages: