The most common reason why people choose to incorporate their business is to protect their personal assets, for example a home, car or family savings. If your business should fail, personal assets are generally safe. The limited liability feature of corporations is not available in a sole proprietorship or partnership where the individual or partners are personally liable for all business debts.

If you conduct business without being a limited liability company, you place your assets at risk. This way by separating your personal property from your business property with a legal form such as a corporation, it can protect your personal property.

It doesn’t matter whether your corporation is based in Delaware or not physically; as a corporation your purchases in Delaware are not subject to tax.

There are many benefits to choosing to incorporate your business in Delaware but probably top of the list, making it one of the most popular, is that costs are some of the cheapest in America, with currently only eight states having cheaper incorporation fees.

The benefits of incorporating in Delaware

Investors choose to start a business in Delaware for many reasons. One is that the state provides a complete package of services, including modern and flexible corporate laws, a highly respected Court of Chancery, a business-friendly state government and it’s tax friendly for non-residents. A Delaware LLC gives all the advantages of incorporating in Delaware as well as the corporate status of a limited liability company, so it’s the best of both worlds.

Delaware is a straightforward state but financially you need to know what you are doing as each state in America is governed very differently.

Incorporation in Delaware, often takes just a week without you even having to visit the US, however it’s important to make sure you choose a firm of experts, experienced in incorporating there. You want to be able to find a company you can trust, who works with accredited local lawyers and accountants without having to spend the time trying to research and find them for yourself.

The many tax benefits

There are many tax benefits for company formations in Delaware and number one is that there is no corporate income tax for corporations as long as they don’t trade from Delaware. That means that you could incorporate the business in Delaware but operate in another state or even country and still pay no corporate income tax.

There is also no sales tax as long as you are not operating within Delaware and the annual franchise tax is often just a $125.000 flat fee, or $250.00 for a LLC incorporation.
If the owner is living outside of the state of Delaware, their shares of stock are not liable to Delaware state taxes.

  • One individual can act as the company president, secretary, treasurer and sole director.
  • Numerous types of business can be operated under a single corporate structure.
  • There is no call for meetings between shareholders as in Delaware, they can communicate in writer.
  • Non-shareholders are allowed to join the board of directors.
  • Corporate records can be kept in any state.
  • Delaware has no sales tax or personal property tax.

Call us today to find out  more information on Delaware.

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