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Why Companies Incorporate in Delaware
T GOVERNMEN MEET
2 The Court of Chancery, “a unique, centuries-old business
court that has written most of the modern U.S. corporation case law,” Knight said. “Their commitment to settling cases that come before them in an equitable and predictable manner is unrivaled.” (See page 12 for more about the Court of Chancery.)
3 The state’s strong corporate and legal services community,
which has “unparalleled expertise in the application of Delaware Corporate Law,” Knight said. It also “receives strong, bipartisan support from the Delaware General Assembly and our Governor for its efforts to continuously improve the state’s laws.” (For more about Delaware’s legal community, see page 12.)
4 The Delaware Secretary of State’s Division of Corporations,
which “offers a wide array of services to meet the needs of the corporate community while providing prompt, friendly and professional service,” Knight said.
The Secretary of State’s office “does a great job of being accessible,” Rozanski agreed, facilitating a level of access
By Tina Irgang Leaderman
More than 1.9 million legal entities are incorporated in the state of Delaware. In fact, the First State is the domicile of choice for the Fortune 500, with more than two-thirds calling Delaware their corporate home.
“Business owners and investors have the discretion to select any juris- diction as their legal home for their business entity,” said Kristopher Knight, Chief Deputy Secretary of State and Director of the Delaware Division of Corporations.“ However, they consistently choose Delaware. ”According to Knight, this preference comes down to four main reasons:
Delaware’s General
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Corporation Law, which is “widely regarded as the most advanced and flexible business formation statute
in the nation,” he said. Delaware first adopted the law in 1899 to attract more businesses to the state.
“The laws here are enabling, not
prescriptive,” said Russell P. Rozanski, President of Agents of Delaware, Inc., which provides a range of support services to companies that have already incorporated in Delaware or are looking to do so. “They allow you a great deal of flexibility, which translates to predicta- bility for our clients.”
Furthermore, the law evolves with
the times as new needs and issues arise, Knight said. “The State of Delaware is constantly working to keep its law modern and flexible. The Delaware General Assembly enacts and the Governor signs amendments to the Delaware General Corporation Law almost every year.” Those amendments are the result of recom- mendations from the Law Council — a stakeholders group comprised of various experts in the corporate law sector of the Delaware State Bar Association.
“The Council’s charge is to leave their client interests at the door and consider changes that will continue Delaware’s tradition of maintaining a modern, flexible, efficient, predictable statute,” Knight said.
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