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The Benefits of Setting up a Limited Liability Company in Delaware

The Benefits of Setting up a Limited Liability Company in Delaware

November 21, 2012 Blog

The Benefits of Setting up a Limited Liability Company in Delaware 

Delaware is one of the most popular states for setting up a company. There are various benefits to reap by incorporating your company in the state while operating in another location. These include no Corporate Income Tax for corporations, no Sales Tax, and exemption from Delaware state taxes on stock shares.

 A Limited Liability Company is the most popular type of company to incorporate as it provides the owner and directors with protection of their personal assets. If the company should be unsuccessful, personal assets such as a home, car or family savings are not implicated. This protection of limited liability is only offered in LLC companies. Other types of company such as Sole Proprietorships or Partnerships hold the individual or partners personally liable for all business debts. Operating with limited liability separates your personal property from your business property and is a much safer way to start out.

Delaware offers a range of benefits to investors incorporating a company in the state. It is one of the cheapest states in the US with low operating costs, and a corporation does not pay tax on any purchases in Delaware.

Incorporation Benefits

A Delaware LLC provides all the advantages of incorporating in Delaware in addition to the corporate status of a Limited Liability Company

 Delaware provides a range of services including:

• Modern and flexible corporate laws
• A highly respected Court of Chancery
• A business-friendly state government
• The incorporation process takes just a week and your personal presence is not required in the State

 It is important however, to be aware of the financial legislation as each State has different regulations, and to obtain the support of an experienced incorporation firm with authorised local lawyers and accountants.

Tax Benefits

Delaware’s taxation benefits are some of the most advantageous in the US:
• There is no Corporate Income Tax for corporations not operating in the State
• No Sales Tax for corporations not operating in the State
• The annual Franchise Tax is often just a $125.000 flat fee or $250.00 for an LLC 
• No Personal Property Tax

 

LLC Requirement Benefits

• One person can be employed as the company president, secretary, treasurer and sole director
• The single corporate structure caters for all types of business
• Shareholders can communicate through writing, there are no mandatory meetings
• The board of directors can consist of non-shareholders
• There are no regulations on how to keep corporate records

 

All of these benefits demonstrate why Delaware is such a popular state for US incorporation. An LLC is a perfect business vehicle for various types of company and the taxation benefits are incredibly advantageous for achieving great return on your investment.

 

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