When starting a business, timing is everything. One of the biggest decisions a business owner in New York can make is selecting the right state to incorporate their business. One of the most popular choices—especially among tech companies—is Delaware. Although the process for creating a Delaware corporation is fairly straightforward, many business owners need help from local experienced counsel to navigate the process.

Delaware boasts many advantages for business owners, such as an attractive tax structure, flexible corporate laws, and an inviting business climate. But incorporating in Delaware is not suitable for all businesses, and New York business owners should carefully weigh their options before taking the plunge. This guide explores the basics of incorporating a Delaware corporation and provides resources to help business owners find the legal counsel they need.

Benefits of Incorporating in Delaware

Delaware is a highly desirable location for companies of all sizes looking to form and incorporate. Several studies have shown that more than half of all publicly-traded companies and two-thirds of Fortune 500 companies are incorporated in Delaware. Home to a body of corporate law that reaches back to the 19th century, Delaware is a well-established business powerhouse. Business owners in New York can benefit from Delaware’s stable legal structure in several ways:

Core Business Costs Stay Consistent

Unlike many other states, Delaware’s incorporation fees are a fraction of the costs in other states. Companies incorporated in Delaware pay a flat fee, typically ranging from $40 to $90 annually. Because fees remain consistent, business owners can expect their annual taxes and fees to remain steady. Plus, Delaware does not place a yearly franchise tax on corporations with a limited number of shares. That means businesses in the state can enjoy predictable costs.

Detailed and Up-to-date Corporate Laws

Delaware is one of the only states to offer a statewide Court of Chancery. This court means that business owners don’t have to wait for their legal matter to migrate up through the state court system. This is particularly beneficial for those wishing to litigate corporate matters such as shareholder disputes. Plus, Delaware has updated its corporate laws to reflect modern business practices.

Tax Advantages for Shareholders and Businesses

Business owners in Delaware don’t need to worry about excessive taxes. The state does not impose franchise taxes if businesses are organized as a corporation and have fewer than 1.5 million authorized shares. Delaware also does not tax corporate income, capital gains, or intangible personal property like trademarks and copyrights. Furthermore, there is no state or local sales tax.

Finding Legal Counsel for Delaware Legals Services

Business owners in New York who choose to incorporate a Delaware company should find experienced legal counsel. Finding the right lawyer is crucial to a successful incorporation. Business owners should look for registered and licensed attorneys who have a high level knowledge of Delaware’s corporate laws. Additionally, they should also consider hiring an attorney who is knowledgeable of local state laws in New York and in Delaware.

UpCounsel is a valuable resource for finding local counsel in New York who can provide expert legal advice concerning Delaware corporation formation. The UpCounsel platform enables business owners to access high quality attorneys on demand, reducing the amount of time spent searching for a lawyer. Business attorneys in UpCounsel’s network have an average of 14 years of experience and come fully vetted for quality and expertise. UpCounsel attorneys provide businesses of all sizes with cost-effective legal services and have a wealth of experience navigating Delaware state law.

Final Word

Incorporating a Delaware corporation can be an effective and profitable choice for business owners in New York. Delaware is known for its friendly business climate, favorable tax structure, and detailed corporate laws. When looking to incorporate a company, business owners in New York should consider UpCounsel to help them find the experienced counsel they need.

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