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The annual filing fees and documents required by Delaware is arcane. Things like “annual meeting of the shareholders” for a single-person S-corp.

markdown 4y ago
Are you saying that Wyoming doesn't have those requirements?
- TedDoesntTalk 4y ago
  Not if you mark your corporation as a “close” corporation (limited to 35 employees). The entity type does not matter (C, S, LLC). “Abbreviated governance - shareholders may agree in writing to treat the corporation as a partnership, operate without a board of directors, dispense with annual meetings, and make a shareholder agreement. Advantages • Limited liability - the law says shareholders don’t have personal liability even though they relax corporate formalities in operations. • Ease of operation - operates without pomp and circumstance required in regular corporations where hundreds of shareholders must receive information and vote. • Cost of operation - relaxed corporate governance means lower legal, accounting and administrative fees for lower total costs of operation. • Deadlock prevention - provides access to court when shareholders are deadlocked and harm could befall the corporation through lack of action. • Buy-out provisions - shareholders may buy out a deceased shareholder’s interest according to shareholder agreements” https://sos.wyo.gov/Forms/Publications/ChoiceIsYours.pdf https://sos.wyo.gov/Forms/Publications/ChoiceIsYours.pdf Many of the disadvantages listed are no different than for other corporate entities.
  - markdown 4y ago
    Hey thanks. That's very helpful.
gumby 4y ago
I can’t agree they are arcane. Back when the tax form was filed on paper it was a postcard-sized form: calculate one way on one side, the other way on the other side, and pay the lower amount. And the point is that once you are established the laws are well known and understood by corporate lawyers (in other words the opposite of arcane, at least for lawyers) and so will be easier to deal with for all parties. If you’re starting a small business just incorporate in the state you live in. If you’re starting a startup, don’t go for a false economy.

markdown 4y ago

Are you saying that Wyoming doesn't have those requirements?

TedDoesntTalk 4y ago
Not if you mark your corporation as a “close” corporation (limited to 35 employees). The entity type does not matter (C, S, LLC). “Abbreviated governance - shareholders may agree in writing to treat the corporation as a partnership, operate without a board of directors, dispense with annual meetings, and make a shareholder agreement. Advantages • Limited liability - the law says shareholders don’t have personal liability even though they relax corporate formalities in operations. • Ease of operation - operates without pomp and circumstance required in regular corporations where hundreds of shareholders must receive information and vote. • Cost of operation - relaxed corporate governance means lower legal, accounting and administrative fees for lower total costs of operation. • Deadlock prevention - provides access to court when shareholders are deadlocked and harm could befall the corporation through lack of action. • Buy-out provisions - shareholders may buy out a deceased shareholder’s interest according to shareholder agreements” https://sos.wyo.gov/Forms/Publications/ChoiceIsYours.pdf https://sos.wyo.gov/Forms/Publications/ChoiceIsYours.pdf Many of the disadvantages listed are no different than for other corporate entities.
- markdown 4y ago
  Hey thanks. That's very helpful.

gumby 4y ago

I can’t agree they are arcane. Back when the tax form was filed on paper it was a postcard-sized form: calculate one way on one side, the other way on the other side, and pay the lower amount. And the point is that once you are established the laws are well known and understood by corporate lawyers (in other words the opposite of arcane, at least for lawyers) and so will be easier to deal with for all parties. If you’re starting a small business just incorporate in the state you live in. If you’re starting a startup, don’t go for a false economy.