Why incorporate in my home state?

Many business owners choose to incorporate in the state in which they are conducting business. If business will be conducted in another state, the corporation must qualify to do business in that state. For instance, if one formed a Nevada corporation but the business would be doing business in California, the corporation would also have to qualify to conduct business in California. In order to qualify, one must draft the appropriate legal documents and the corporation must register with the state and pay the associated filing fees (called “foreign qualification”). Lawyers Limited can help you to qualify your corporation to do business in additional states.

The Benefits of Incorporating in Delaware

The State of Choice – More than 50% of the Fortune 500 companies and nearly half of the companies on the New York Stock Exchange are incorporated in Delaware.

✔️ Speed – A Delaware corporation can be formed in 24 hours by phone or internet. For an extra fee, Delaware has a 1 hour and a 2 hour incorporation option.

✔️ Legal Protection – Delaware has a special court called the “Court of Chancery” that only sees corporate law cases. This court uses judges that specialize in corporate law. Therefore, the decisions tend to be more consistent than courts that use juries. This may decrease lawsuits for the following reason: Rather than litigate, many attorneys will settle disputes out of court by referring to the decisions in similar cases.

✔️ One Person Corporation or LLC – Delaware law allows one person to hold all offices and allows one person to be the sole shareholder of a corporation or sole member of a limited liability company.

✔️ Tax-Savings – There is no income tax in Delaware when the corporation operates outside of the State. (There may be taxes in the state of operation.)

✔️ Flexible Ownership – You do not have to be a resident of Delaware or a U.S. citizen to own and operate a Delaware corporation.

✔️ Low-Startup Cost – The costs for forming a Delaware corporation or LLC are among the lowest in the US.

✔️ Can Do Business in Any State – A Delaware corporation, like corporations formed in other states, may conduct business in any state. There are some minimum filing requirements called “foreign qualification.” Lawyers Limited can assist in the foreign qualification process.

✔️ Raising Capital – Delaware corporations may trade stock for capital, services, personal property or real estate, including leases and options. The directors may determine the value of the transactions.

✔️ Business Friendly Laws – Delaware corporate code provides substantial protection for officers, directors and shareholders of a Delaware corporation or LLC.

✔️ Low Annual Cost – The annual filing fee requirement on a Delaware corporation is one of the lowest in the US.

Do I have to live in Delaware?

No, you do not have to live in Delaware. A corporation is required to maintain a registered agent within the state. (Lawyers Limited provides this service.)

How quickly can I incorporate in Delaware?

Unlike other states where incorporation may be an extended process, Delaware has gone to great lengths to expedite proceedings with its 1-hour, 2-hour, same day and 24-hour processing and document filing.

Franchise tax

Delaware corporations benefit from the exceedingly low annual franchise taxes. Annual franchise tax obligations could be as low as $30 annually.
Delaware uses the Authorized Shares Method for Franchise Tax Calculation:

• Less than 3,000 shares (minimum tax) $30.00
• 3,001 – 5,000 shares $50.00
• 5,001 – 10,000 shares $90.00
• Each additional 10,000 shares $50.00

Delaware Corporation Annual Report

Annual reports are required to be filed annually on or before December by a registered agent of the corporation. The filing fee is $20.

The Benefits of Incorporating in Nevada

✔️ Speed – A Nevada corporation can be formed in 24 hours by phone or internet.

✔️ Privacy – The stockholders of a Nevada corporation are not in the public records.

✔️ Anonymity – Nevada allows “Bearer Stock Certificates.” You have the option of writing your name on the stock certificate or the words “The Bearer.” This may provide relief by handing the stock certificates to a trusted friend or relative when your ownership of the stock is threatened.

✔️ Tax-Savings – When combined with the Nevada Office Program and Nominee Privacy Service, a Nevada corporation operates in Nevada state TAX-FREE.

✔ Corporate income TAX FREE

✔ Franchise TAX FREE

✔ Capital stock TAX FREE

✔ Corporate share TAX FREE

✔ Estate TAX FREE

✔ Inventory TAX FREE

✔ Personal income TAX FREE

✔ Stock transfer fee or TAX FREE

✔ Inheritance TAX FREE

✔ Gift TAX FREE

✔️ Flexible Ownership – You do not have to be a resident of Nevada or a U.S. citizen to own and operate a Nevada corporation.

✔️ Tax Privacy – Nevada does not have a formal information sharing agreement with the IRS.

✔️ Low-Startup Cost – No minimum capitalization requirement. You can organize without any cash or tangible capital beyond basic filing fees.

✔️ One Person Corporation – One person can serve as all officers and directors.

✔️ Can Do Business in Any State – Same as Delaware. Must meet “foreign qualification” rules in other states.

✔️ Raising Capital – Stock may be traded for capital, services, property, leases, options, etc.

✔️ Business Friendly Laws – Nevada corporate code revised to provide efficient and protective structure for incorporation.

✔️ Estate-Planning – No estate tax. Shares owned by non-residents are taxed only in their own state.

✔️ Ease of Operation – Stockholders/directors can act by unanimous consent without formal meetings.

✔️ Flexibility of Dividend Payments – Can pay dividends out of profits or surplus.

✔️ Flexibility of Business Purposes – Can conduct any lawful business.

✔️ Flexibility of Operation – Directors can create or alter bylaws.

✔️ Strong Liability Protection – Officers/directors protected from personal liability.

✔️ Low Annual Cost – Filing fee is only $85 annually.

✔️ Lending Flexibility – No usury law in Nevada. Corporations can charge any interest rate.

✔️ Strong Protection History – Corporate veil has not been pierced when operated properly; rare exceptions only in cases of intentional fraud.