Why is it that 60% of the Fortune 500 companies chose to incorporate in the state of Delaware when most don’t have a physical presence there? Well, the answer is that Delaware offers some tangible advantages over incorporating in other states. Here are 6 compelling reasons to incorporate in Delaware now.

1. Cost.  Let’s face it. Most entrepreneurs have to make every penny count. Because Delaware is the home of so many corporations, they have very low state filing fees as compared to other states. The state fee for a Delaware incorporation is $90. This compares to $275 in Massachusetts and $300 in Texas.
2. Speed.  Because Delaware’s entire economy is based on corporate filings, they have a very efficient state infrastructure. In most cases, you can file your incorporation documents and form your new corporation within 24 hours. In other states, this process could take weeks. 
3. Tax Advantages.  Corporations and LLCs typically pay very minimal taxes to Delaware since there are no state corporate income taxes for companies that were formed there but are doing business outside of the state. Each year Delaware corporations are subject to an annual franchise tax which is based on the number of shares outstanding and can be as low as $75 for corporations. Now if you compare this fee to many other states that base corporate taxes on a percentage of the company’s income you can see that Delaware taxes can come out to substantially lower amounts. Also, non-residents are not subject to personal income taxes. This means that the shareholders of a corporation will not need to worry about filing a separate tax return in Delaware.
4. Corporate Legal Advantages.  Delaware’s large body of business laws helps companies minimize the risk of lawsuits. Should a company be served with litigation, Delaware’s Court of Chancery focuses solely on judges that specialize in corporate law, as opposed to most other states that use juries of one’s peers. If you had to go through the legal system, wouldn’t you want to plead your case to someone who is a specialist as opposed to your neighbor from next door? 
5. Simplicity.  As most companies expand and grow beyond their local boundaries, maintaining corporate records for multiple entities in multiple states becomes a complex administrative burden. Choosing one business jurisdiction like Delaware for domestic business formation simplifies recordkeeping and makes compliance easy. Delaware annual reports and franchise taxes are due on the same day every year. Compliance couldn’t be easier. 
6. Credibility.  As a new organization gets off the ground, many prospective customers question its staying power. By forming a Delaware corporation, you send a signal to your target market that you are a serious business that plans to grow and expand. You plan to be one of the Fortune 500 one day. The credibility that comes with being a Delaware Corporation goes a long way in today’s competitive environment.

You don’t have to be a Delaware resident or have a physical presence in Delaware to form a Delaware corporation  and enjoy the many advantages listed above.

If you are thinking of forming a corporation, why not form in Delaware?