Many clients call us with questions about incorporating in Delaware. While each business plan is unique, and you can legally incorporate in any state no matter where your business is located, there are a few things that you, the business owner, should be aware of.

The Advantage:
Delaware requires less information about the founders of a corporation than other states and the added privacy may be important to you. Delaware (more than 50% of the Fortune 500 are incorporated in Delaware) is attractive for other reasons as well. Delaware has an extremely well established body of law, does not seek to tax income earned in other jurisdictions, has an excellent, informed business court in its Court of Chancery and is very pro-business. For all these reasons, Delaware corporations are a known commodity in business circles (particularly banking) and are always well received.

The Potential Disadvantage:
Small business owners and entrepreneurs can actually wind up spending more money by incorporating in Delaware if it is not their home state. If an entrepreneur or small business is conducting business in its home state, they will also have to qualify to do business there. This could wind up costing you an extra few hundred dollars, not to mention certain additional annual fees. Of course, the extra few hundred may not mean much to you or you may have a strategic reason for choosing to incorporate in a particular state.

Start A Business.com does recommend that you consult with an Accountant and/or Legal Professional before you incorporate your business. Having your questions answered by a legal professional will enable you to make the decision of whether or not it's beneficial to you and your business to form an entity in Delaware. Having that information beforehand will allow us to provide the best level of service to you, and also keep your costs down.

Click here to see Delaware State Compliance Requirements