Why Should I Incorporate or Form an LLC in Delaware?
Delaware is an easy and reliable state in which to incorporate or form LLCs, plus the annual cost is low and the owners of the LLC as individuals are given the strongest legal protection available by any state. This is demonstrated by a US Chamber of Commerce study of state liability systems that has rated Delaware #1 in all eight studies it has conducted on all 50 states. A few examples of Delaware’s benefits include:
Easy and Reliable
- Delaware law has been tested and provides predictability.
- Delaware regularly updates its laws to remain the leading state for incorporation.
- Delaware has a separate Court of Chancery that handles corporation law cases quickly and competently.
- The Delaware Corporation minimum annual franchise tax is $175 and the filing fee is $50.
- The Delaware LLC annual fee is $300, regardless of capitalization.
- Delaware does not tax intangible property such as leases or royalties (the “Delaware loophole”).
- Piercing the corporate veil, or making individuals personally liable for claims against their business, is very unlikely in Delaware.
- Delaware explicitly makes the charging order the sole and exclusive remedy of creditors of LLC members, meaning that creditors of members can only receive distributions from the LLC, and not control foreclosure, or liquidation.