Before deciding where to incorporate your business, take some time to understand the advantages and drawbacks involved in setting up your business in Delaware.
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by Brette Sember, J.D.
Brette is a former attorney and has been a writer and editor for more than 25 years. She is the author of more than 4...
Updated on: December 4, 2023 · 3min read
Many corporations incorporate in Delaware. And there are good reasons why this state is so popular for incorporating. However, there are also distinct disadvantages to registering your company in Delaware.
These are some of the pros and cons you should consider before deciding whether you want to register your company in this state.
According to the Delaware Division of Corporations, 67.8% of Fortune 500 companies are incorporated in Delaware, and 1.5 million corporations have registered in the state.
The State of Delaware has worked hard to position itself as the place for incorporating a business. The advantages of incorporating here include:
While Delaware offers distinct benefits, there are also significant drawbacks to incorporating there. It should be noted that it makes the most financial sense to file your business in your home state in nearly all circumstances.
Here are other factors to consider:
While Delaware does offer benefits to companies who incorporate within the state, it's primarily large corporations that derive the greatest advantage. Small businesses should carefully weigh the additional costs involved against the benefits of incorporating in the state before making a decision.
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