Archive for July 2017

Delaware Corporation Law – Shareholders on blockchain

As you think about where to incorporate a business, you may be considering Delaware or Nevada. More than half of public and Fortune 500 companies are incorporated in Delaware, and Nevada. Delaware holds many advantages—but smaller business may not find it as beneficial. Here are the highlights:

  • Delaware’s business law is one of the most flexible in the country.
  • The Delaware Court of Chancery focuses solely on business law and uses judges instead of juries.
  • For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (there is a franchise tax though).
  • Taxation requirements are often favourable to companies with complex capitalization structures and/or a large number of authorized shares of stock.
  • There is no personal income tax for non-residents.
  • Shareholders, directors and officers of a corporation or members or managers of an LLC don’t need to be Delaware residents and now can be recorded via Blockchain.*
  • Stock shares owned by persons outside Delaware are not subject to Delaware taxes.
  • No personal income tax for non-residents.

*Amendments to Sections 219, 224 and 232 and related provisions are intended to provide specific statutory authority for Delaware corporations to use networks of electronic databases (examples of which are described currently as “distributed ledgers” or a “blockchain”) for the creation and maintenance of corporate records, including the corporation’s stock ledger.

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