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Hi, Thanks for joining me
you're interested in Delaware corporations
in this video
I'm going to cover what corporations are
what advantages come from having a corporation
and why you would want your corporation to be in Delaware
Now if you're interested in LLCs there is another video covering that
so see the link on this page to our website
I hope you find this video helpful
So, what are Delaware corporations?
Don't be afraid if you really don't understand what a company or
a corporation is.
a lot of people mistakenly mix up the difference between the
business structures
for example
some refer to their business as a company
when it is actually sole proprietorship
one business structure is the corporation
also known as a company and it's a separate legal entity
so just like a real person
the corporation can carry on a business in it's own right
Separately from its owners, a corporation can sue
or be sued
by people just as it were a real person
Now delaware corporations
are corporations created or incorporated in Delaware USA
The owners of a corporation are called shareholders
and they can be individuals but they can be other legal types such as another
corporation a partnership or even a combination of these types
Shareholders elect a board of directors to manage the corporations
business
So, like individuals
corporations pay tax on the income
but it's at the corporate rate
Any profit that's not held back in the business
may be distributed to shareholders and that's called dividends
and that's income for the shareholder
Now the shareholder's liability is limited to the amount of money that they
have contributed to the company
unless of course they
personally guarantee any corporate debt
Investors and venture capitalists generally prefer to work with
corporations and often Delaware is the state preferred by
experience investors
in delaware
the corporation has to types. There is a C-Corp and an S-Corp
and the difference between these two is mainly the tax treatment and ownership
so
only US citizens may be the owners of S-Corps
now what are the advantages of Delaware corporations
well there are many advantages to creating a corporation in Delaware
there are few if any restrictions on
who takes ownership or management responsibilities
transferring ownership is simple
especially when compared to
some of the other business structures
originally corporations were the way people separated their business
liabilities from the personal lives and that was to protect their assets
and that's still the case
the corporation structure has accumulated a lot of laws over the years
which affects the structure well understood and provides greater certainty
They have an unlimited lifespan and are generally
the structure preferred by most investors as I mentioned before
So why would you incorporate in Delaware?
well the well-known phrase used in the real estate industry
which is location location location
is also applicable
when it comes to forming
a company
and especially your company so location can have a significant bearing on
your business
so if you live in the US but you don't necessarily have to base your company
in the same state in which you live
corporations a great
for those people who live in the U_S_ and have a "bricks and mortar" business
the most practical step to take for you would be to incorporate your company in
the state in which you live
if the business operates in more than one state
the company must register in every state in which it operates but only one
state will be the company's domicile state
now that this is the state in which the company was first created
the company's domicile state
may be different to the state in which the owner lives
so as for other businesses where the business operation can be based any
where or say it's on the internet
it's a virtual operation or for those that operate internationally
there are some great choices available
for us Delaware is
the leading site
it's the leading state for company formation and its known as a heavy hitter
This state boasts some impressive reasons
to start your company there
For starters
more than half of all publicly-traded companies in the U_S_ including sixty
three percent
of the Fortune 500
have Delaware as their home state
it has almost one million business entities
and the state's corporation law is amongst the oldest in the U_S_
the Delaware Corporation Law is one of the most advanced
flexible and business-friendly state laws so it's generally taught in law
schools
around the country and most experienced attorneys are well versed in
in its statutes
so Delaware also has a unique
Court of Chancery
I was going to say Chancery Court
and that
makes it extremely experienced
it's been around for over two hundred twenty years and it's actually written most of
the U_S_ corporation case law
So there are some other states around the have similar
advantages but Delaware for our
purposes
is the one we're focusing on because it has so many advantages
i think you'll be in good company basing in your business entity there
Now if that wasn't enough reasons
there are also some favorable tax
advantages to choose
Delaware as your state
The state has
a small annual corporate tax and no other state taxes apply
unless of course you happen to be established
there. Anyway I hope you found this helpful there are many more things I cover on
our website so if you want to learn more about corporations
LLCs taxes banking etc.
check back on
help to incorporate in delaware dot com with little dashes in between each of
those words
or click on the link below
okay thanks for that See you soon