The three main reasons that makes Delaware a well known corporate sanctuary.
1. The state doesn’t charge any income tax on business not
operating within the state which makes it ideal to charter your business there.(
note: All Delaware corporations must pay an annual corporate franchise tax.
2. Certain laws, like the Delaware general corporation law, permit
maximum flexibility to corporate operations. You don’t even need to have a
presents in the state, with the one exception of a registered agent to accept
service of legal operations and to pay the corporations annual franchise taxes.
3. Courts in Delaware
tend to be more experienced in corporate law do to the very large number of
corporations charted there. In fact one of the last courts of equity resides in
Delaware. A
dispute over an internal affair would be filed with the court of chancery. So,
what’s a court of equity? It is a court with no juries. Its cases are decided
by the judges of the court, which would consist of one Chancellor and four Vice-
chancellors. Sence the court of chancery cannot award money damages their
superior court also hears a lot of cases between corporations involving claims
for money. Also, do the large number of businesses chartered in Delaware their
federal bankruptcy court handles many high-profile insolvency, and the united
district court in Delaware consider many patent disputes between corporations.
A good example of Delaware
charted companies are computer businesses. To protect themselves from hostile
takeovers, many computer related companies incorporate in the state of Delaware and base their head quarters in Silicon Valley. Silicon Graphics incorporated in Cali in 1981 reincorporated in Delaware in 1990.