Incorporating in Delaware

Delaware Companies

Delaware companies include Delaware corporations and Delaware LLC’s. Delaware LLC’s are often referred to as Delaware limited liability corporations or limited liability companies which are known as the Delaware LLC for short.

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Though these two types of companies in Delaware share some similarities, they have differences that may result in one corporate form being chosen over the other depending on preference.

Delaware companies may be best described in comparison with each other so as to provide a comprehensive over of the topic. In fact, there are two main types of Delaware corporations (S Corporations and C Corporations); the focus here is however on the C Corporation. A Delaware company offers many benefits which stem from the legislation under which Delaware corporations/companies are governed.

Limited liability corporations which are also known as Delaware LLC are very popular as offshore companies and may tend to be preferred over the Delaware corporation. Though the Delaware corporation also has limited liability, the Delaware LLC is taxed differently and has a simpler management structure which entrepreneurs may find attractive.

Delaware companies are popular worldwide not only because of Delaware corporate law, but because of the numerous benefits the Delaware limited liability corporations (Delaware LLC) present as offshore companies. The fact that Delaware is a state of the US also makes Delaware corporations and limited liability corporations credible entities that are readily acknowledged and accepted internationally.

Delaware companies (Delaware LLC) simply have members whereas Delaware corporations have directors, shareholder and officers, which make the management structure a bit more complex than that of the Delaware LLC. In Delaware corporations, officers are elected by the directors who in turn are elected by the shareholders. In limited liability corporations or Delaware LLC, the members may or not appoint officers or persons external to the company to take on certain duties or to manage on a daily basis.

Another reason why Delaware limited liability companies (Delaware LLC) is because of how they are taxed. For one, Delaware corporations are subject to double taxation because shareholders pay withholding tax in dividends while the corporation pays tax on profits. On the other hand, a Delaware LLC is taxed based on a system whereby the members are individually taxed on their personal income. The double taxation that Delaware corporations are subject to is considered one of the major disadvantages of this Delaware company.

Delaware companies (LLC) and corporations are however taxed only to the extent of the amount of income that is generated in Delaware. Therefore, if a Delaware corporation or Delaware LLC does no or very little business in the US, then taxation, whether double as in the case of Delaware corporations or on a pass through basis, as in a Delaware limited liability corporation (llc), taxes can be minimized.

Delaware companies are easy to form because to incorporate in Delaware the requirements are quite simple. Potential owners of Delaware companies are required to provide identification documents such as a copy of a passport or national identification card, to fill in an application or order form and provide certain information. Delaware company incorporation is done through a licensed agent.

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