3 ms·

Never understood the obsession with Delaware Corps. You have to register where you live anyway (presumably that's where you make $$$). So what's the big deal wi

Never understood the obsession with Delaware Corps. You have to register where you live anyway (presumably that's where you make $$$). So what's the big deal with Delaware?

tptacek 18y ago
I'm not sure what you mean by, "have to register where you live". Apart from all the standard BS about corporate-friendly laws, the reason to do Delaware is simple: Delaware makes it really easy to incorporate. You pay a small (periodic) fee, and that's pretty much it. You don't have to run an ad in the paper (like you do in NYC!). You don't have to wave a rubber chicken around. You can do it from a web app with a PayPal account, and then a week later have an EIN/tax id.
- ricardog 18y ago
  If you want to do business in California (for example because that's were I live) and your business is incorporated in Delaware, you have to "register" the business in California and designate a "registered agent". Plus you have to file & pay taxes in California and then file taxes in Delaware. Any business incorporated outside California is called a Foreign Entity (not kidding). Here's a link for you http://www.sos.ca.gov/business/corp/corp_faq.htm#question8 http://www.sos.ca.gov/business/corp/corp_faq.htm#question8 I agree the whole "corporation friendly" stuff is BS. Don't know abut NYC, but you can form a business in CA just as easily. Go to a web page, press the buttons and a week later you get the legal looking documents. I did this to form an LLC. A final comment. After I had setup my LLC (to do consulting) and I proudly showed up at my accountant's office at year's end, he basically told me I was wasting my time and money. Until you get to $1M is revenue per year lawyers won't go after you (there's no money in it for them). His words, not mine.
  - tptacek 18y ago
    $1MM/yr is 4 consultants at heavy utilization, or a very good second year of shipping a product, so that number isn't at all scary, but more to the point, my tolerance for risks to my family and personal assets is pretty low. I guess if you live in California, form a California corp. There are other reasons to avoid Illinois and New York corporations, hence Delaware.
inklesspen 18y ago
Delaware is business-friendly. They have a special court set up (http://en.wikipedia.org/wiki/Delaware_Court_of_Chancery http://en.wikipedia.org/wiki/Delaware_Court_of_Chancery) with a whole lot of business case precedent. So, if you have a dispute with a Delaware corp, it's easier to predict the outcome.

Never understood the obsession with Delaware Corps. You have to register where you live anyway (presumably that's where you make $$$). So what's the big deal with Delaware?

tptacek 18y ago

I'm not sure what you mean by, "have to register where you live". Apart from all the standard BS about corporate-friendly laws, the reason to do Delaware is simple: Delaware makes it really easy to incorporate. You pay a small (periodic) fee, and that's pretty much it. You don't have to run an ad in the paper (like you do in NYC!). You don't have to wave a rubber chicken around. You can do it from a web app with a PayPal account, and then a week later have an EIN/tax id.

ricardog 18y ago
If you want to do business in California (for example because that's were I live) and your business is incorporated in Delaware, you have to "register" the business in California and designate a "registered agent". Plus you have to file & pay taxes in California and then file taxes in Delaware. Any business incorporated outside California is called a Foreign Entity (not kidding). Here's a link for you http://www.sos.ca.gov/business/corp/corp_faq.htm#question8 http://www.sos.ca.gov/business/corp/corp_faq.htm#question8 I agree the whole "corporation friendly" stuff is BS. Don't know abut NYC, but you can form a business in CA just as easily. Go to a web page, press the buttons and a week later you get the legal looking documents. I did this to form an LLC. A final comment. After I had setup my LLC (to do consulting) and I proudly showed up at my accountant's office at year's end, he basically told me I was wasting my time and money. Until you get to $1M is revenue per year lawyers won't go after you (there's no money in it for them). His words, not mine.
- tptacek 18y ago
  $1MM/yr is 4 consultants at heavy utilization, or a very good second year of shipping a product, so that number isn't at all scary, but more to the point, my tolerance for risks to my family and personal assets is pretty low. I guess if you live in California, form a California corp. There are other reasons to avoid Illinois and New York corporations, hence Delaware.

inklesspen 18y ago

Delaware is business-friendly. They have a special court set up (http://en.wikipedia.org/wiki/Delaware_Court_of_Chancery http://en.wikipedia.org/wiki/Delaware_Court_of_Chancery) with a whole lot of business case precedent. So, if you have a dispute with a Delaware corp, it's easier to predict the outcome.