FEATURES OF DELAWARE CORPORATION
The prestige enjoyed by Delaware as a corporate domicile is in part
due to the emphasis which the state has placed in making its corporate
laws, court system and infrastructure attractive to businesses. The
success achieved by the state is reflected in the almost one third
contribution to the income of the state government from registration
and franchise taxes.
Other frequently cited reasons for Delaware’s popularity as
a company domicile include:
(1) Delaware is the only state within the U.S. to have a separate
Court of Chancery whose judges are highly experienced in company law.
The decisions of that court have established a body of law relevant
to corporations which are frequently followed by other courts in the
U.S. The Delaware General Corporation Law is used as a standard by
which the corporate laws of other states are tested; it is the corporate
code that is used in most U.S. law schools to train lawyers which
results in greater familiarity with Delaware corporate law among lawyers.
(2) Delaware does not impose a corporate income tax on corporations
that are formed in Delaware but which do not transact business in
the state. Non-resident companies only pay an annual franchise tax
to the state with a minimum of US$50.00 payable annually.
(3) The large numbers of well-known companies that have selected Delaware
as their corporate domicile has influenced many other small and medium
sized companies to adopt the same strategy.
OF DELAWARE CORPORATIONS
. No disclosure of the names of shareholders.
. One individual (who need not be a shareholder) can hold all corporate
offices and be the sole director.
. The annual state franchise tax is low.
. Meetings and records can be held anywhere in the world.
. Shareholders and directors can act by written unanimous consent.
. No minimum capital is required in order to commence business.
. No residency requirements for shareholders, officers and directors.
. Corporations can be established for any lawful act or activity.
. No state income taxes for corporations which do not transact business
in the state.
. Special provisions can be included in the Certificate of Incorporation
and By-Laws which exculpate officers and directors from personal liability
and provide indemnification of officers, directors and shareholders.
DELAWARE CORPORATE STRUCTURE
The Certificate of Incorporation is the public document registered
with the Office of the Secretary of State of Delaware on formation
of a corporation.
By-Laws are the regulations of the corporation as adopted by the Directors
which describe the procedures by which the management of the company
is to operate.
The Stockholders are the owners of the company but they do not manage
the company. Typically, they hold common stock and have the right
to one vote for each share they own. Only one Stockholder is required.
The Directors manage the company and are responsible for the affairs
of the company such as the issuance of shares, election of officers,
approving transactions and establishing corporate policies. Only one
Director is required.
The Officers of the company are appointed by the Directors and handle
the day-to-day business of the company. The officers carry out the
Board’s decisions and implement the Board’s policies.
Officers are usually the President, Vice President, Secretary and
FOREIGN OWNERSHIP OF DELAWARE CORPORATIONS
There are important tax and corporate governance issues relating to
the ownership by non-U.S. persons of a Delaware corporation. These
. No restrictions on foreign ownership or management of the corporation.
. Shareholders may be individuals or business entities of any nationality
. With the exception of a Registered Office and Registered Agent in
Delaware, no physical presence in Delaware is required.
. The By-Laws of a corporation are not a matter of public record.
. No disclosure in the public record of the names of the shareholders
of the corporation.
. The corporate records may be maintained outside the U.S.
. As a corporation incorporated within the United States the company
is required to comply with U.S. Federal Tax and Reporting requirements.
A Federal Tax Identification Number must be applied for and on an
annual basis the company is required to file a tax return with the
U.S. Internal Revenue Service.
A Certificate of Incorporation is filed with the office of the Secretary
of State of Delaware upon the incorporation of the company which lists:
. The name of the corporation which must end with the words “Company”,
“Corporation”, “Limited” or “Incorporated”
or one of the abbreviations such as “Co.”, “Corp.”,
“Ltd.” or “Inc.”.
. The name and address in Delaware of the corporation’s registered
agent and registered office.
. The nature of the business or purposes to be conducted or promoted.
. The total number of shares of stock which the corporation shall
have the authority to issue and any designations, preferences, rights,
qualifications, limitations or restrictions on the shares.
On March 1st of each year, every Delaware Corporation must file an
annual Franchise Tax Report and pay an annual Franchise Tax. The tax
is based on the authorized share capital of the corporation and the
Tax Report must include the names and addresses of the Directors and
Officers. Late filing of the report and payment of the tax will incur
penalties and interest which is compounded monthly.
Name availability search, name reservation, preparation and filing
of the Certificate of Incorporation (including all filing fees), preparation
of share register, issuance of shares, preparation of by-laws, liaison
Annual Maintenance USD625
Providing Registered Office and Registered Agent services including
forwarding and filing of Annual Franchise Tax Report.
Note: Annual maintenance cost for the second year and thereafter of
USD625 cover state franchise tax.
Apostille of Certificate of Incorporation
Arranging to have the certificate of incorporation apostilled by the
Secretary of State of California is also covered by the incorporation
Each corporation is provided with a filed copy of the Certificate
of Incorporation, standard By-Laws and Form SS-4 (Application for
Employee Identification Number).
Our Delaware incorporation service also includes the provision of
a corporate kit which contains stock certificates, corporate seal,
stock transfer ledger and shareholders register.
Company fees are billed in advance upon formation and annually thereafter.
Due to the nature of the service provided fees are not refundable.
Work performed in addition to the services described above will be
charged at our standard rates applicable to the personnel performing
the work. Such time will be billed in arrears either monthly, semi-annually
or annually depending on the volume of work performed.
. Hourly rates for additional services:
– Directors $200
– Senior Personnel $85-150
– Junior Personnel $35-75
. The above fee schedule excludes disbursements which are billed separately.
. Special transaction fees may be charged for work of a particularly
onerous, time critical, high value or otherwise exceptional nature.
. The company may retain brokerage, insurance and any other commissions
received in the normal course of its business.
. Fees and expenses are quoted and payable in U.S. dollars.
. Fees are subject to annual review.
. Different fees may apply where instructions are received directly
from the beneficial owner.