The United States (“US”) is the world’s third largest country in terms of size and plays a major role in the global economy. With a predictable and transparent legal system, outstanding infrastructure and access to the world’s largest consumer markets, a business in the US is essential to doing business in North America. Despite being geographically divided into 50 states, more than 75% of all new initial public offerings in the US are done by companies who have completed their US company formation processes in the state of Delaware. Delaware company laws and quality of courts and judges have created an ideal environment for businesses of all sizes.
Company formation in Delaware is a simple process with limited requirements. Delaware does not impose any minimum capital requirements and there are no restrictions on foreign shareholders given that there is no nationality or residency requirement to satisfy. There are also no restrictions on the number of shareholders a Delaware company can have
In addition, a Delaware company is only required to have at least one director and is not limited by residency or age requirements. Furthermore, company directors are not required to be listed in the company’s Articles / Certificate of Incorporation.
Delaware company law requires that every business entity must have and maintain a Registered Agent in the state of Delaware. The Registered Agent may be either an individual resident or business entity that is authorized to do business in the State of Delaware. The registered agent must also have a physical street address in Delaware although the Delaware company is not required to have a local registered address for the purposes of company formation.
Registered Agents act as the liaison between a Delaware company and the State of Delaware’s Division of Corporations who is responsible for overseeing and maintaining all corporate information in the state.
Their primary responsibilities are to receive and forward government notices and legal documents to the Delaware company. Oftentimes, Delaware companies will engage third-parties to act as their Registered Agent. FastLane can assist in this role upon request.
Most often, overseas companies will establish a presence in the US through forming a subsidiary in Delaware. While the State of Delaware allows for the formation of a variety of company types, limited liability corporations (“LLC”) are the most common. Although LLC’s are frequently used, careful consideration is recommended due to the differing governance and tax aspects related to each company type.
Delaware’s reputation as a business-friendly environment is the result of a bi-partisan political consensus to keep the Delaware company laws modern and up-to-date. Corporations who operate under these laws are able to clearly identify what activities they can and cannot do.
To support the above laws, Delaware is home to a high number of quality courts and judges. The Court of Chancery in Delaware is one such court that helps rule on corporate law disputes without juries. This allows for a Delaware company to address their legal disputes promptly by judges who specialize in corporate law.