Delaware US State
Advantages to Incorporate in Delaware

Delaware
A Tax Haven
For Non US Residents

Protection of Personal Assets

The major reason why individuals choose to incorporate their business is to protect their personal assets, such as a home, car or family savings. In the event of a lawsuit or if your business should fail, your personal assets can not generally be touched. This limited liability feature of corporations is not available in a sole proprietorship or partnership, where the individual or partners are personally liable for all business debts.

Tax Advantages

Corporations and LLCs can take advantage of tax savings options that are not available to sole proprietorships or partnerships. For example, corporations can establish pension, profit-sharing and stock ownership plans, which can lower the corporation’s taxable income. Medical, life and disability insurance premiums are also completely tax deductible for corporations. In addition, a corporation can own shares of stock in another corporation and receive 80 percent of the dividends tax-free.

Corporations can raise capital by issuing stock,bonds or other securities. Corporations and LLCs are the most enduring form of business structure. If a corporation owner dies, their portion of the business can be transferred quickly without interruption of the corporation’s operations.

Estate and family planning is simplified since shares of a corporation can be easily distributed to family members.

Corporations and LLCs often experience a greater ease in doing business. Many stores and banks favor corporate accounts and offer discounts.

Tax Advantages

Corporations and LLCs can take advantage of tax savings options that are not available to sole proprietorships or partnerships. For example, corporations can establish pension, profit-sharing and stock ownership plans, which can lower the corporation’s taxable income. Medical, life and disability insurance premiums are also completely tax deductible for corporations. In addition, a corporation can own shares of stock in another corporation and receive 80 percent of the dividends tax-free.

Corporations can raise capital by issuing stock,bonds or other securities. Corporations and LLCs are the most enduring form of business structure. If a corporation owner dies, their portion of the business can be transferred quickly without interruption of the corporation’s operations.

Estate and family planning is simplified since shares of a corporation can be easily distributed to family members.

Corporations and LLCs often experience a greater ease in doing business. Many stores and banks favor corporate accounts and offer discounts.

Corporation

Although the most formal corporate structure, a general business corporation is the most widely used by both small and large businesses and offers the fewest restrictions. A general business corporation may have an unlimited number of stockholders/owners whose personal assets are generally protected in the event of a lawsuit against the corporation or if the business fails. A stockholder’s liability is usually limited to the amount of investment in the business and no more.

Limited Liability Company (LLC)

Limited Liability Companies are a type of business entity. An LLC is a legal entity separate and distinct from its owners, who are called “members.” The rights, duties and obligations of LLC members are governed by an “operating agreement.” The provisions of the operating agreement are extremely important as they can have a direct impact on how both the LLC and its member-owners are taxed for federal income tax purposes. In addition to tax matters, the operating agreement typically deals with issues of management of the LLC by either members or non-members, transfer of interests in an LLC and termination of the LLC.

When properly structured under applicable state statutes, LLC members have the same limited liability protection which is afforded stockholders in “C” or “S” corporations. This means that, absent any specific personal guarantees, the amount at risk for members of an LLC is limited to their investment in the LLC. Thus, the personal assets of members are generally beyond the reach of the creditors of the business. This liability protection is enjoyed by all members, unlike a limited partnership where at least one general partner must remain liable for partnership debts. And, unlike limited partners, LLC members may be active in the management of the LLC without risking their limited liability status.

LLC members may also enjoy the same flow-through tax benefits which are applicable to partners of a partnership.
An S Corporation also provides limited liability protection to its investors as well as flow-through tax treatment. Nevertheless, there are distinct differences. To begin, there is more flexibility in an LLC then in an S Corporation. For example, members of an LLC may include any number of individuals, partnerships, corporations, trusts, non-resident aliens, etc. This is not the case with S Corporations which require that only individuals and certain trusts and estates own stock and which limit the number of shareholders to no more than 75. Moreover, S Corporations have “one class of stock” restrictions. In addition, all distributions and allocations must be the same for each share. Should an S Corporation violate any of these rules, it causes the S election to be revoked. LLCs may (and typically do) base distributions and allocations on the basis of member contributions, rather than on a per capita basis.

Non-Profit Corporation

A non-profit corporation is designed for businesses engaged in charitable, religious, educational or scientific activities that benefit society in general. The net income of non-profit corporations must be used to further the not-for-profit goals of the corporation, not to enrich individual officers, members or directors. Most non-profit corporations have either tax-exempt or 501(c)(3) status, which exempts them from paying taxes on their income. To get either of these tax designations, an Application for Recognition must be filed by the client (or his attorney) with the IRS and be approved. We will prepare the paperwork for non-profit corporations for only the states of Delaware and New York.

S Corporation

Many business owners find the S corporation attractive because all earnings or losses are passed directly through to their personal income tax return. This avoids the double taxation aspect of a general business corporation. There are, however, certain requirements that must be met to qualify for S corporation status. We recommend that you consult with your tax advisor before choosing this type of business structure. To obtain the S corporation tax status, all shareholders of the corporation must sign IRS Form 2553, and it must be filed with the IRS within 75 days of the date of incorporation. American Incorporators can assist you with this filing.

Our Firm will form your new Delaware corporation including all service fees and filing fees.

Our complete incorporating services, include:
* Checking and reserving your preferred corporate name
* Preparing and filing your Certificate of Incorporation
* Promptly forwarding the filed copy of the Certificate of Incorporation to you
* Providing the required statutory agent services free for the remainder of the first calendar year

If I incorporate in Delaware, can I do business in other states?
Yes. Your Delaware corporation is known as a domestic corporation in Delaware. In other states, it is considered a foreign corporation. Depending on the nature of the business, you may have to register your Delaware corporation in the state(s) where you plan to maintain offices, hire employees and transact business. However, many businesses prefer to operate as a Delaware business in their home state because of Delaware’s many corporate advantages and low annual franchise tax. ATRIUM INCORPORATORS can register your business in any state.

How do I form a corporation or LLC in the state of my choice?
The formation of a corporation or LLC is not a difficult process, and in most cases, it can be accomplished quickly and efficiently by a professional incorporating service, such as our Firm. As your agent, we will investigate the availability of your proposed corporate name and reserve it for you. Next, we prepare a Certificate of Incorporation. All state filing fees are paid through ATRIUM Incorporators to the appropriate state agencies.

What information is required to prepare a Certificate of Incorporation?
In addition to the name of the corporation and the address, you need to provide the director(s) name(s), the county and state where the corporation will be located, and the number of shares of stock that you want authorized. Using this information, ATRIUM INCORPORATORS can prepare and file the necessary documents.

Do I need a special ending on my corporation’s name?
In most states, your corporation’s name must include an ending, such as company, corporation, incorporated, limited, association, club, fund, syndicate, union or the appropriate abbreviations (co., corp., inc., ltd., etc.).

Do I need an attorney to form a corporation or LLC?
No. If you use a professional incorporating service, such as ATRIUM INCORPORATORS, it is not necessary to use an attorney to form a corporation or LLC. However, ATRIUM INCORPORATORS is always willing to work with your attorney, if you prefer.

Can ATRIUM INCORPORATORS provide registered agent services in every state?
Yes. In addition to forming corporations and LLC’s in all 50 states, ATRIUM INCORPORATORS has a nationwide network of registered agents that can represent your corporation. Registered agent services for Delaware corporations and LLCs is based on a calendar year. For Delaware LLCs, this fee is due by June 1 of every year.

What is the difference between “par” and “no par” stock, and how much stock do I need?
Par value stock has a stated value on its face. No par value stock has no stated value and its worth depends on what an investor is willing to pay. Unless we are instructed otherwise, ATRIUM INCORPORATORS always requests the minimum amount of authorized shares of no par value stock, so you qualify for the minimum incorporating fee or minimum annual franchise tax.

How and when will I know if my corporation or LLC is formed?
Delaware corporations and LLCs are formed the next day you call us. You will receive your filed documents within five to seven business days. Corporations and LLCs can be formed in other states within 48 hours, and you will receive those filed documents within 7-10 business days.