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If you think Panama is bad, wait until you hear about Delaware

• briandear 11y ago
  This makes the assumption that secrecy is 'bad.' Tax evasion is illegal; secrecy is not. On another note, nearly all of Silicon Valley uses Delaware corporations and it isn't about secrecy inasmuch as its about legal protection and lower costs. Anyone even remotely interested in using Stripe Atlas is participating in using the advantages of Delaware. Delaware has a minimum franchise tax of $250; California's is a minimum of $800. Delaware also has a highly developed canon of corporate law precedents, so legal outcomes are far more predictable. You also have easier exits since in California, a majority of each share class is required to effect a corporate change, such as a merger, acquisition or IPO. So common stock holders could veto an exit even if preferred classes vote 100% for the exit. So one guy has one share of common stock and another guy has 50k shares of another class.. The common guy, with his one share could block an exit, since ÇA law requires a majority of each share class. If you want to reduce the attractiveness of Delaware, increase the attractiveness of the alternatives, lower fees, lower taxes, increase predictability in legal outcomes and become more 'friendly' to corporations. It would be interesting to see how many Valley startups would stay in CA if they were forced to incorporate in CA. I would suspect that Vegas would become the new San Jose.