Registering an LLC in Delaware

Registering an LLC in Delaware
Registering an LLC in Delaware

Many entrepreneurs choose to register an LLC in Delaware. The investment attractiveness of Delaware is due to several factors:

  • A clear and consistent legal system. A local legislation in force covers almost all relations between the investor, manager, employees, consumers of products. This allows companies to avoid lawsuits.
  • A corporate governance legislation is loyal to all enterprises.
  • An effective work of the administrative system. A process of reviewing documents in Delaware is at a high level. There is always the option of expedited review at higher rates.
  • A rapid functioning of commercial courts. To resolve disputes in Delaware, there is a separate Chancellor Court. Its feature is the absence of jurors. Almost any business dispute is handled in the courts of Delaware within a few months.
  • A developed case-law.

LLC offers the benefits of LTD and Limited Partnership. It is an effective opportunity to protect a liability and assets. At the same time, this gives the beneficiary an opportunity to take advantage of a tax-free jurisdiction, if the activity is conducted outside a state.

Why is it necessary to establish an LLC in Delaware? State courts are eager to resolve corporate disputes in Delaware, many of which are related to mergers and acquisitions in Delaware.

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You can register a Delaware company of such type:

  • Delaware Corporation;
  • Delaware Limited Liability Company (LLC).

Corporation or LLC - what to choose? - comparison table

CORPORATION

LLC

A structure of a company

it includes: directors, shareholders and officers

it includes: shareholders and one manager

Annual reports

it must submit a report indicating data of all directors/officers

no reporting obligations

A taxation

Most Corporations pay an annual deductible tax of $225. This tax may be higher, if a Corporation is authorized to issue more than 1,500 shares

Delaware LLC fixed tax rate is $300

A confidentiality

The annual report of the Delaware Corporation must contain the names and actual addresses of all directors/officers, as well as an address of the actual place of business

Delaware does not impose requirements for the storage of names and addresses of members of LLC

A responsibility

The liability of shareholders is limited by the amount of their investment in the Corporation

LLC members’ liability is limited by the size of their LLC investments

Meetings of shareholders

A Corporation is obliged to organize annual Meetings of shareholders

There is no requirement to hold meetings

Investments/increase of share capital

A corporation can increase its capital by selling shares privately or on a public stock exchange. Its ownership is indicated on Stock Certificates

An LLC can increase its capital by selling shares privately. Shares may be bought or sold, but may not be publicly traded

A compliance with the law

A registration agent is required

A registration agent is required

Why should you register an LLC in Delaware remotely?

  • When you order registering an LLC in Delaware, you protect your personal assets. When you cannot pay your debts to the creditor, then creditors can have only an economic interest in the distribution of the LLC, but not in a controlling stake, they are not entitled to liquidate the LLC.
  • You can open an LLC in Delaware, wherever your business is located. In addition, the owner is not required to open a bank account in Delaware.
  • Establishing a company in Delaware provides an opportunity to reduce/eliminate fiduciary obligations of the enterprise.
  • Registering an American LLC allows you to not pay taxes, if the activity is not carried out in the state.
  • Courts resolve business disputes in Delaware within a few weeks.

If you are interested in registering an LLC in the state of Delaware - contact YB Case specialists for professional advice!

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