Delaware Corporations

Delaware is a small state placed on the East Coast of the United States of America, often titled the “Gateway to the United States”. Distincted by few regulations and a lack of bureaucracy in seting its affairs up, and with the Delaware Corporation Law being considered throughout the US among the most attractive for organisation purposes, it is a valuable jurisdiction in which to organise new companies.

The policy of Delaware courts has always been to construe the Corporation Law liberally, to interpret any ambiguities or uncertainties in the working of the Statutes so as to reach a reasonable and just construction. This causes the careful saver to have confidence in the security of the investment.

Corporations not having any business in Delaware pay no Delaware Corporate income tax.  Franchise tax compares favourably with other states and is payable on the authorised share capital of a company at a rate of 1%. Nonetheless it should be noted that Delaware corporations do fall within the Federal Tax System.

A Delaware corporation has the following characteristics:

• Annual Reporting
  A franchise tax report must be accomplished each year showing details of the corporation officers. Though accounts need not to be filed.

• Directors
  A minimum of one director is required and there is no restriction on his nationality.  The offices of President, Vice-President and Treasurer may be centered in the sole director.

• Shareholders
  It’s mandatory a minimum of one shareholder and bearer shares are not allowed.

• Taxation
  Shares owned by non-residents are free from all taxes, including State Inheritance Taxes.

• Restrictions on Name and Activity
  Corporation names must end with one of the following words or abbreviations thereof – Association, Company, Corporation, Club, Foundation, Fund, Incorporated, Institute, Society, Union, Syndicate or Limited. The following words and connected activities cannot be used: Bank, Trust, University, College or School.

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Remark:

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, this information does not constitute legal or other professional advice.