Delaware is a small state situate on the East Coast of the United
States of America, often referred to as the "Gateway to the United States".
Marked by few regulations and a lack of bureaucracy in arranging its affairs, and with the
Delaware Corporation Law being considered throughout the US among the most attractive for
organization purposes, it is a valuable jurisdiction in which to organize new companies.
The policy of Delaware courts has always been to construe the
Corporation Law liberally, to interpret any ambiguities or uncertainties in the working of
the Statutes so as to reach a reasonable and fair construction. This causes the careful
investor to have confidence in the security of the investment.
Corporations not having any business in Delaware pay no Delaware
Corporate income tax. Franchise tax compares favorably with other states and is payable
on the authorized share capital of a company at a rate of 1%. It should be noted however
that Delaware corporations do fall within the Federal Tax System.
[ BACKGROUND ] [ COMPANY FORMATION ]
[ SHARE CAPITAL, TAXATION, LICENCE FEES &
COMPLIANCE ]
[ STRUCTURE OF MANAGEMENT ]
CORPORATE FEATURES
| GENERAL |
| Type of Company |
C Corporation |
LLC |
| Political Stability |
Excellent |
| Common or Civil Law |
Common |
| Disclosure of Beneficial Owner |
No |
| Migration of Domicile Permitted |
Generally No |
Generally Yes |
| Tax on Offshore Profits |
Yes |
Nil, but see section on
tax |
| Language of Name |
Latin Alphabet
|
| CORPORATE REQUIREMENTS |
| Minimum Number of Shareholders/Members |
1 |
1 |
| Minimum Number of Directors/Managers |
1 |
1 |
| Bearer Shares Allowed |
No |
N/A |
| Corporate Directors/Managers Permitted |
No |
Yes |
| Company Secretary Required |
Yes |
N/A |
| Standard Authorized Share Capital |
NO par value |
N/A |
| LOCAL REQUIREMENTS |
| Registered Office/Agent |
Yes |
Yes |
| Company Secretary |
No |
N/A |
| Local Directors/Managers |
No |
No |
| Local Meetings |
No |
No |
| Government Register of Directors/Managers |
No |
No |
| Government Register of Shareholders/Members |
No |
No |
| ANNUAL REQUIREMENTS |
| Annual Return |
Yes |
Yes |
| Submit Accounts |
Yes |
No but see section on tax
|
| RECURRING GOVERNMENT COSTS |
| Minimum Annual Tax/Licence Fee |
$35 |
$100 |
| Annual Return Filing Fee |
$20 |
|
GENERAL INFORMATION
The United States of America is the third-largest country in the world
in population, and it is the fourth-largest country in area. China and India are the only
countries with more people. Only Russia, Canada and China have larger areas.
The United States is comprised of the 50 states and the District of Columbia, home to
the nation’s capitol, Washington, DC. The United States covers the entire midsection
of North America, stretching from the Atlantic Ocean in the east to the Pacific Ocean in
the west. It also includes Alaska, in the north-west corner of North America; and Hawaii,
far out in the Pacific. The United States is often called the US, USA, or America.
The land of the United States is as varied as it is vast. It ranges from the warm
beaches of Florida and Hawaii to the frozen northlands of Alaska, and from the level
Midwestern prairies to the snow-capped Rocky Mountains. This huge and beautiful country is
rich in natural resources. It has great stretches of some of the most fertile soil on
earth, a plentiful water supply and excellent water routes, and large stretches of
forests. Huge deposits of valuable minerals, including coal, natural gas and petroleum,
lie underground.
POPULATION
The United States has a population of around 265 million and has one of the
world’s most varied populations in terms of ancestry. The population includes
descendants of people from almost every part of the world. Approximately 92% of
today’s total population were born in the United States. The largest foreign-born
groups are Mexicans, Germans, Canadians, Italians, Cubans and Filipinos.
The United States has an average population density of about 71 persons per square mile
(28 persons per sq km). However, the density varies widely from place to place.
POLITICAL STRUCTURE
The United States is a federal republic bound by the United States Constitution. Each
of the 50 constituent states and the District of Columbia exercises a measure of internal
self-government. Defence, foreign affairs, coinage, posts, the higher levels of justice,
and internal security are the responsibility of the federal government.
The President is head of the Executive and is elected to a four-year term by a college
of representatives elected directly from each state. The President appoints the other
members of the Executive, subject to the consent of the Senate.
The Congress is the seat of legislative power and consists of the Senate (100 members)
and the House of Representatives (435 members). Two senators are chosen by direct election
in each state, to serve a 6-year term, and one-third of the membership is renewable every
two years. Representatives are elected by direct and universal suffrage for a two-year
term. The number of representatives of each state in Congress is determined by the size of
the state’s population.
Ultimate judicial power is vested in the Supreme Court, which has the power to disallow
legislation and to overturn executive actions, which it deems unconstitutional.
The US has a two major political parties, the Democratic and the Republican. Both
parties receive support from individuals and groups in all parts of the country. Members
of these two parties hold almost all of the offices in the national, state and local
governments.
INFRASTRUCTURE AND ECONOMY
The United States ranks first in the world in the total value of its economic
production. Although the United States economy is based largely on a free enterprise
system, the government has placed regulations on economic practices through the years. It
has passed anti-trust laws, which are designed to keep one company or a few firms from
controlling entire industries.
Additionally, government regulations help protect consumers from unsafe merchandise,
protect workers from unsafe working conditions and unreasonably low wages, and help reduce
environmental pollution. In spite of the involvement of the government, the United States
still has one of the least regulated economies of the world.
Varieties of natural resources provide the raw materials that support the economy of
the United States. In addition to a moderate climate, the most valuable resources are
minerals, soils, water, forests and fish. Service industries account for 74% of the US
gross domestic product and employ 76% of the country's workers. Community, social and
personal services rank first, and finance, insurance and real estate rank next among US
service industries.
Wholesale and retail trade plays major roles in the American economy. Important US
exports include machinery and transportation equipment, such as aircraft, computers,
electric power equipment, industrial machinery, and motor vehicles and parts. Manufactured
articles, chemical elements and compounds, basic manufactures and agricultural products
round out the spectrum of exports.
Leading US imports include machinery and transport equipment; manufactured articles
such as clothing, shoes and toys; mineral fuels and lubricants; basic manufactures such as
iron, steel and other metals, and paper and newsprint; and chemical products, such as
chemical compounds and medicines. Government services, (federal, state and local
governments buy a fifth of all the goods and services produced in the nation) and
transportation, communication and utilities are important to the economy. Manufacturing
accounts for 18% of the gross domestic product and employees 16% of the workforce.
The value of American manufactured goods is greater that any other country. The leading
categories of US manufactured products are, in order of value, chemicals, transportation
equipment, food products, non-electrical machinery, electrical machinery, printed
materials, scientific and medical instruments, fabricated metal products, paper products,
rubber and plastic products, and primary metals. Construction accounts for 4% of the US
gross domestic product, agriculture accounts for 2%, and mining accounts for 2%.
LANGUAGE
The United States has never had a official language, but English has always been the
chief language spoken in the country. Immigrants from the British Isles, who included the
nation’s founders, spoke English. Today, Spanish is the second most common language
in the United States.
CURRENCY
The US Dollar.
TYPE OF LAW
Based on English Common Law.
COMPANY FORMATION
PROCEDURE TO FORM
Corporation: Filing of Articles of Incorporation or Certificate of Incorporation with
the Secretary of State.
LLC: Filing of Articles of Organization or Certificate of Formation with the Secretary
of State.
LANGUAGE OF LEGALIZATION AND CORPORATE DOCUMENTS
English. If any other language is used it must be accompanied by a translation in
English.
REGISTERED OFFICE REQUIRED
Yes. Must be maintained in state of incorporation/formation at the office of a
professional registered agent.
shelf COMPANIES AVAILABLE
Yes.
TIME TO INCORPORATE/FORM
Generally 2 days, but must allow an additional 5 - 7 business days for delivery of
documentation.
NAME RESTRICTIONS
Corporation: Anything identical or similar to an existing company within the state of
incorporation. Additionally, the use of bank or trust within the name of the corporation
is prohibited in all 50 states without first obtaining consent from the banking
authorities in the state of incorporation.
LLC: Anything identical or similar to an existing company within the state of
formation. Additionally, the use of bank, trust, insurance or reinsurance within the name
of the LLC is generally prohibited in all 50 states. This is because limited liability
companies in most states are simply not allowed to engage in a banking or insurance
business.
LANGUAGE OF NAME
The name can be in any language. Some recommended states require an English
translation.
SUFFIXES TO DENOTE CORPORATION
Corporation: Incorporated, Corporation, Limited, Company or their abbreviations Inc,
Corp, or Ltd. Some of the recommended states allow other suffixes such as Fund,
Association, Foundation, Syndicate, Club, Society and Institute.
LLC: Limited Liability Company and Limited Company or their
abbreviations LLC or LC.
SHARE CAPITAL, TAXATION, LICENCE FEES AND COMPLIANCE MATTERS
US FEDERAL TAXATION
Corporation: US Corporations are required to file a US Federal Income Tax Return (IRS
Form 1120 or 1120A) and pay tax at a progressive rate depending upon the amount of net
income. This requirement holds true regardless if the owners (shareholders) are US
citizens, non-resident aliens or a combination thereof. Even if the corporation conducts
no business in the US and there is no US-source income, it must still comply with the
federal tax reporting requirements and payment of tax on world-wide income.
LLC: US limited liability companies structured for partnership tax treatment with
non-resident members and which conduct no business in the US and which have no US-source
income are not subject to US federal income tax and are not required to file a US income
tax return.
STATE TAXATION
US limited liability companies that conduct no business in the recommended states of
formation are generally not subject to state income tax and are not required to file a
state income tax return.
ANNUAL REPORT/LICENSE FEES
CORPORATIONS
Corp |
Franchise Tax |
Report Fee |
Due Date |
| Delaware |
US$ 55 |
US$ 20 |
March 1 |
LLC
LLC |
Fee |
Due Date |
| Delaware |
US$ 200 |
June 1 |
FINANCIAL STATEMENTS
Corporation: There is generally no requirement to file financial statements with the
state of formation unless the corporation owns assets within that state or has conducted
business within that state.
LLC: There is generally no requirement to file financial statements with
the state of formation unless the corporation owns assets within that state or has
conducted business within that state.
STRUCTURE OF MANAGEMENT
DIRECTORS/MANAGERS
Corporation: The minimum number of directors is one, who must be a natural person.
Directors may be of any nationality and need not be a citizen of the United States.
LLC: One manager either a natural person or a body corporate of any nationality.
SHAREHOLDERS/MEMBERS
Corporation: The minimum number of shareholders is one. A shareholder of a US
Corporation may be another corporation (even an international or "offshore"
corporation).
LLC: The minimum number of members is two. This number (or
greater) ensures automatic tax classification as a partnership, the
advantages to which are described above under
"Taxation".
Click here to ORDER a Delaware company
FIND/BUY RELATED
BOOKS!
Whilst
every effort has been made to ensure that the details contained herein are correct and
up-to-date, it does not constitute legal or other professional advice. We do not accept
any responsibility, legal or otherwise, for any errors or omissions.
Please go to our Uses of offshore Companies Page where you will
find interesting information on the benefits of using offshore companies and trusts for
business and personal use, links to information on other locations and details of our
products and services.
