Delaware at a Glance

Delaware is bounded by Pennsylvania in the north, the Delaware River and the Atlantic Ocean in the east and by Maryland in the west and the south. The largest city is Wilmington, and the capital is Dover. The name "Delaware" comes from the title of Thomas West, 3rd Baron De La Warr, former governor of the colony of Virginia. Delaware was the first of the thirteen states, which drafted and ratified the Federal Constitution, and is thus known as "The First State". Delaware's fourth and current constitution was adopted in 1897 and provides for executive, judicial and legislative bodies. The legislative body consists of a House of Representatives with 41 members and a Senate with 21 members.

Delaware Companies

Located midway between New York City and Washington D.C., Delaware, which is among the more sparsely populated states, sits among one third of the entire population of the US and has excellent access to major domestic and export markets by highway, railway, air and sea routes. The infrastructure is highly developed. Delaware is well known for the 'Delaware General Corporation Law' which is said to be the friendliest in America, and it is certainly the most advantageous for entrepreneurs and promoters of any enterprise within the United States. Also the dedicated court called 'The Chancery Court', which adjudicates on matters of Delaware Company Law, is fast and efficient. The trials are by appointed judges (not a jury), who issue written and deliberated decisions. This means that you most certainly will be 'in the know' about the rules of a stable legal system when you incorporate in Delaware. Delaware is the home to 50% of corporations listed on the New York Stock Exchange. Many major corporations are chartered in Delaware such as Federal Express, UPS, Walt Disney, to name just a few. Almost every international or interstate bank or finance house is registered in Delaware. To round this off, more than 85 % of all FORTUNE 500 corporations are registered in Delaware. Also, foreign enterprises and groups have discovered the advantages of the Delaware-Model and have settled down long ago - in the form of a Holding.

Some of the advantages of taking your business to Delaware:

Delaware is the recognised leader in corporate, limited liability and limited partnership law.
You can form a Delaware corporation, limited liability company, or business entity without going to Delaware.
The owners and operators of a Delaware corporation or limited liability company are not required to be identified in the public records of the State.
One person can be the sole director and officer of a corporation or sole member and manager of a limited liability company.
Delaware has a minimal corporate franchise tax (as low as $60.00 per year) that is not based upon income.
There is no Delaware income tax for Delaware corporations or limited liability companies that do not do business in Delaware.
For European citizens it is also interesting to know that you can incorporate with European corporate suffixes, i.e. GmbH, S.a.r.l., or S.A.

Limited Liability Company (LLC)

In October 1991, Delaware enacted the legislation, which enables the formation of a Delaware Limited Liability Company (LLC). The LLC was first enacted in the Wyoming in 1977, and has by now been adopted in varying forms in all 50 states of the USA. Delaware is well known for its General Corporation Law and as an attractive location for company formation. When organised well, LLCs in Delaware combine the best aspects of a Corporation (a company limited by shares) and a Limited Partnership. This form of organisation protects the personal assets of its owners while affording them 'pass-through' taxation without most of the restrictions inherent in the US "S" Corporation. Most importantly, for a person or group of persons, who wish to own a US company that provides the benefits similar to a traditional offshore company (IBC) registered in an offshore tax haven, a Delaware LLC sometimes referred to as "Delaware offshore company" or "Delaware company for non-residents", is tax-exempt on business transactions and benefits derived outside the United States and whose members are US non-resident persons. To enjoy US tax benefits, it is recommended that the LLC has two or more members.

Features of a Delaware Limited Liability Company:

The Delaware LLC is recognized anywhere in the world as a legally registered US company.
A Delaware LLC may be formed by one or more member.s For tax purposes, non-resident legal entities (such as companies or corporations), who are members of the LLC may cause the IRS to classify the LLC as a branch of a foreign company in the US, and the LLC will be taxed on its worldwide income. It is, therefore, recommended that the non-resident members of a Delaware offshore company be physical persons.
An LLC does not issue shares and therefore does not have shareholders. The owners of an LLC are referred to as members.
A Delaware LLC is a legal entity, registered with the state, and is treated separately from its members.
Due to the Limited Liability status, the law protects members (owners) in terms of debts and other obligations of the LLC.
After the incorporation of a Delaware offshore company the owner is liable according to the extent of his investment in the LLC, i.e. all his personal assets are protected.
A Delaware Limited Liability Company may be fully owned by non-resident aliens.
An LLC may also be owned by Corporations (companies limited by shares), Partnerships, Trusts, Non-Profit Organisations and Pension Plans.
Upon the formation of a Delaware company, the company name must include "Limited Liability Company", "L.L.C.", or "LLC".
A Delaware LLC is treated on a pass-through tax basis by the IRS. That is the LLC is not taxed on its profits. The income of the LLC is distributed to its members, who are taxed on a personal income basis.
Non-resident aliens are not taxable by the IRS on income derived out of the US. If an LLC derives its income outside of the US, non-resident aliens do not file tax returns.
There is no limit on the number of members allowed in a Delaware LLC.
The management of an LLC is usually undertaken by its members. If regarded as necessary, an external manager may be employed; s/he would report directly to the members.
The structure of the LLC does not provide for a board of directors. The flexibility in the law allows the members to decide on the most appropriate management system and on the distribution of profits by an agreement, written or oral.
The voting authority in direct proportion to members' interest in profits.
The manager of a Delaware LLC may be a member.
There are no statutory requirements concerning the meetings of members or record keeping. It is recommended that with two or more members, a Members' Agreement will be closed.
If meetings are held by the members, this may be done anywhere in the world and in any way convenient to the members.
An Annual Report is required, which sets out the distribution of profits to US residents.
A Delaware Limited Liability Company (LLC) is a good vehicle for non-resident aliens to earn tax free income (not derived in the USA).
Members of a Delaware LLC are not liable for tax in the United States provided that:

The members are non-resident aliens.
The LLC does not employ US residents as permanent staff, or rely on a dedicated place of business within the United States.
The LLC does not undertake any business activity that is effectively connected to business or trade within the United States.
The Delaware LLC is subject to perpetual existence, and membership is easily transferable. It is advisable to enter into a Members' Agreement if alternative conditions are required.

Delaware is recognised for its General Corporations Law, which provides a stable legal platform. There is a Chancery Court which adjudicates on corporate matters. The courts do not use juries, therefore decisions are issued as written opinions and litigation is not settled by the emotions of a jury, but on stable law.

A registered agent and office is required, which we will provide, along with nominee services. We also are able to provide you with nominee managers.

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	Sunday February 05 2012
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