5 Things to Consider When Starting a Delaware Corporation
Starting a business is an exciting time for business owners, always full of decisions and possibilities3 min read
Starting a business is an exciting time for business owners, always full of decisions and possibilities. With such a wide range of options in front of you, it can be hard to know which business structure is the best fit for your business. Here we will take a look at five key things to consider when it comes to forming a Delaware Corporation.
Delaware has become one of the top spots in the United States to incorporate a business. With a host of benefits, a stable economy, and many options available for business formation, it is no surprise that so many entrepreneurs and business owners choose Delaware as the home of their businesses’ legal identity. There are several factors to consider before you take the leap and incorporate in Delaware, so let’s start with the basics.
1. Legal Protection of Personal Assets
The first factor many business owners consider when deciding on a new business structure is legal protection of their personal assets. Since Delaware corporations are separate and distinct legal entities, the corporation’s debts and liabilities are not enough to put the shareholders or owners at risk of personal financial loss. Therefore, forming a Delaware corporation can be an excellent way to protect your personal assets from potential exposure to creditor or debtor legal action.
2. Access to Capital
When your business is a Delaware corporation you may find it easier to obtain capital from a variety of sources. For example, you may be able to attract venture capital or angel investors more easily when you have a Delaware corporate structure. Additionally, Delaware corporations may be able to obtain loans with more favorable terms due to the established reputation and credibility associated with incorporating in Delaware.
3. Tax Benefits
Another factor that frequently comes up when business owners are considering whether or not to incorporate is taxes. Fortunately, Delaware corporations can take advantage of many tax benefits that other forms of business organization do not offer. For example, profits earned by Delaware corporations may be subject to lower state tax rates than some other states, making it a great choice for businesses that have high profit margins. Additionally, having a Delaware corporate structure can provide consistent structure when it comes to filing taxes, making it easier to stay in compliance with the IRS.
4. Corp-Friendly Laws
Delaware is consistently ranked as the state with the most business-friendly laws. This is due to the fact that Delaware has a legal system designed specifically for corporations, providing more predictability and stability for businesses when dealing with potential legal issues. Additionally, Delaware corporations can take advantage of an expedited filing process that allows businesses to get up and running quickly with minimal red tape.
5. Access to Experienced Local Lawyers
If you are based in Los Angeles, then finding counsel that understands local regulations is of particular importance. UpCounsel’s vast network of experienced lawyers have an average of 14 years of experience, meaning you can rest assured that you are in great hands when you are looking for the right legal advice. With UpCounsel, you can access experienced legal professionals on demand, providing you with a cost-effective and easy way to get the legal support you need.
Forming a Delaware corporation can be a great way to protect your personal assets,access financing,and take advantage of tax benefits. Additionally,cool business-friendly laws and the convenience of accessing experienced local attorneys when you are based in Los Angeles make this an ideal choice for many businesses. By taking these five key factors into consideration, you can make an informed decision that is right for your business.