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Encyclopedia > Delaware corporation
Business law
Business organizations
Basic forms:
Sole proprietorship
Corporation
Partnership
(General · Limited · LLP)
Cooperative
USA:
Business trust · LLC · LLLP
Delaware corporation
Nevada corporation
Commonwealth/Ireland/UK:
Limited company
(By shares · By guarantee)
(Public · Proprietary)
Civil law countries:
AB · AG · ANS · A/S · A/S
K.K. · N.V. · OY · S.A. · GmbH
European Company Statute
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
De facto corporation and
corporation by estoppel
Piercing the corporate veil
Related areas of law
Contract · Civil procedure

A Delaware corporation is a corporation chartered in the U.S. state of Delaware. Delaware is well known as a corporate haven, and thus, over 50% of US publicly-traded corporations and 58% of the Fortune 500 companies are incorporated in the state.[1] Image File history File links Scale_of_justice. ... Commercial law or business law is the body of law which governs business and commerce and is often considered to be a branch of civil law and deals both with issues of private law and public law. ... Business organizations is an area of law that covers the broad array of rules governing the formation and operation of different kinds of entities by which individuals can organize to do business. ... A sole proprietorship is a business which legally has no separate existence from its owner. ... A corporation is a legal person which, while being composed of natural persons, exists completely separately from them. ... A partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested. ... This article needs to be wikified. ... A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs). ... A limited liability partnership (LLP) is a form of business organization combining elements of partnerships and corporations. ... Co-op redirects here. ... A Massachusetts business trust or MBT is a legal trust set up for the purposes of business in the state of Massachusetts. ... A limited liability company (denoted by L.L.C. or LLC) is a legal form of business company in the United States offering limited liability to its owners. ... This article or section does not cite its references or sources. ... It has been suggested that this article or section be merged into Nevada. ... It has been suggested that this article or section be merged into Limited liability company. ... A limited company by shares (limited or Ltd. ... A Company Limited by Guarantee (CLG) is a private company that does not have shareholders or share capital. ... The initials PLC after a UK or Irish company name indicate that it is a public limited company, a type of limited company whose shares may be offered for sale to the public. ... A Proprietary limited company or abbreviated as under Australian law is a business structure that has at least one shareholder with a limited number of shares. ... Civil law is the predominant system of law in the world, with its origins in Roman law, and sets out a comprehensive system of rules, usually codified, that are applied and interpreted by judges. ... Aktiebolag is the Swedish term for a corporation, i. ... The German term Aktiengesellschaft (IPA /aktsiÉ™ngÉ™zεlʃaft/) (abbreviated AG) means a corporation which is limited by shares, , owned by shareholders. ... An ansvarlig selskap is a Norwegian personal responsibility company model, mainly used in small-to-medium businesses, which translates directly into Responsible Company. This reflects that the participants - or owners - are personally responsible for any outstanding debts the company would aquire. ... An Aktieselskab (abbreviated A/S) is the Danish name for a stock-based corporation. ... An aksjeselskap is the Norwegian term for a stock-based corporation. ... Business corporation ) is a type of corporation ) defined under Japanese law. ... The term Naamloze Vennootschap (usually abbreviated NV) is the Dutch terminology for a public limited liability company. ... Osakeyhtiö, directly translated as share corporation, is the Finnish equivalent of Limited company (Ltd or LLC) or Gesellschaft mit beschränkter Haftung (GmbH). ... S.A. is the abbreviation of Société Anonyme in French, Spółka Akcyjna in Polish, Sociedad Anónima in Spanish, Sociedade Anónima in Portuguese, or Naamloze Venootschap (N.V.) in Dutch, generally designating corporations in various countries. ... Gesellschaft mit beschränkter Haftung (GmbH or GesmbH) is a type of legal entity created in Germany in 1892. ... The Council Regulation on the Statute for a European Company of the European Union (adopted October 8, 2001; OJ L 294, 10 November 2001, pp. ... Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. ... Limited liability (LL) is liability that is limited to a partner or investors investment. ... Ultra vires is a Latin phrase that literally means beyond the power. ... The business judgment rule is a case law-derived concept in Corporations law whereby a court will refuse to review the actions of a corporations board of directors in managing the corporation unless there is some allegation of conduct that (1) violates (a) the directors duty of care, (b... De facto corporation and corporation by estoppel are both terms that are used by courts to describe circumstances in which is a business organization that has failed to become a de jure corporation (a corporation by law) will nonetheless be treated as a corporation, thereby shielding shareholders from liability. ... The corporate law concept piercing (Lifting) the corporate veil describes a legal decision where an officer, director, or shareholder of a corporation is held liable for the debts of the corporation despite the general principle that those persons are immune from suits in contract or tort that otherwise would only... The examples and perspective in this article or section may not represent a worldwide view. ... Civil procedure is the body of law that sets out the process that courts will follow when hearing cases of a civil nature (a civil action, as opposed to a criminal action). ... A corporation is a legal person which, while being composed of natural persons, exists completely separately from them. ... Federal courts Supreme Court Chief Justice Associate Justices Elections Presidential elections Midterm elections Political Parties Democratic Republican Third parties State & Local government Governors Legislatures State Courts Counties, Cities, and Towns Other countries â€¢ Politics Portal      A state of the United States is any one of the fifty subnational entities referred to... Official language(s) None Capital Dover Largest city Wilmington Area  Ranked 49th  - Total 2,491 sq mi (6,452 km²)  - Width 30 miles (48 km)  - Length 100 miles (161 km)  - % water 21. ... A corporate haven is a jurisdiction with laws friendly to corporations thereby encouraging them to choose that jurisdiction as a legal domicile. ... The Fortune 500 is a ranking of the top 500 United States corporations as measured by gross revenue. ... Incorporation (abbreviated Inc. ...

Contents

Legal benefits

Because of the extensive experience of the Delaware courts, Delaware has a more well-developed body of case law than other states, which serves to give corporations and their counsel greater guidance on matters of corporate governance and transaction liability issues. Disputes over the internal affairs of Delaware corporations are usually filed in the Delaware Court of Chancery, which is a separate court of equity (as opposed to a court of law). Because it is a court of equity, there are no juries, and its cases are heard by the judges, called chancellors. There is currently one Chancellor and four Vice Chancellors. The court is a trial court, with one chancellor hearing each case. Litigants may appeal final decisions of the Court of Chancery to the Delaware Supreme Court. The Delaware Court of Chancery is a court of equity in the United States state of Delaware. ... The Court of Chancery, London, early 19th century This article is about concept of equity in Anglo-American jurisprudence. ... This article is about courts of law. ... For other articles with similar names, see Chancellor (disambiguation). ... The Supreme Court of Delaware is the sole appellate court in the United States state of Delaware. ...


The status of Delaware as a corporate haven is not recent: following the example of New Jersey who enacted corporate-friendly laws at the end of the 19th century, Delaware played the game of fiscal competition by adopting in 1899 a general incorporation act aimed at attracting more businesses.


More broadly, many U.S. states have usury laws limiting the amount of interest a lender can charge, but Federal law allows corporations to 'import' these laws from their home state. Delaware (amongst others) has relatively lax interest laws, in effect allowing banks to charge as much as they want, hence the preponderance of credit card companies and other lenders in the state. Usury (//, from the Medieval Latin usuria, interest or excessive interest, from Latin usura interest) was defined originally as charging a fee for the use of money. ... Interest is the rent paid to borrow money. ... Credit cards A credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. ...


However, other states such as Nevada are more friendly to corporations in certain respects, especially in offering protection from hostile takeovers. It has been suggested that this article or section be merged into Nevada. ... A takeover in business refers to one company (the acquirer, or bidder) purchasing another (the target). ...


Tax benefits

Some mistakenly believe that Delaware's preeminance is related to the fact that Delaware charges no income tax to corporations not operating within the state. However, in this respect Delaware is no different from other states, as no state charges income tax on out-of-state income. An income tax is a tax levied on the financial income of persons, corporations or other legal entities. ...


A state does levy a franchise tax on corporations incorporated in it. Franchise taxes in Delaware are actually far higher than in most other states [1], which typically charge little or nothing beyond corporate income taxes on the portion of the corporation's business done in that state. For instance, Nevada does not have a franchise tax. Delaware's franchise taxes supply about one-fifth of its state revenue.[2] Franchise tax is a tax charged by some US states to corporations formed in those states based on the number of shares they issue or, in some cases, the amount of their assets. ...


Disadvantages to Delaware Corporations

  • Delaware's formation and annual fees are substantially higher than most other jurisdictions.
  • The Delaware Division of Corporations charges a fee to tell you the status of an entity. This is unusual as they are de-facto charging a fee to tell you if you actually owe a fee. An analogy would be if you were to call a creditor and they charged you $10.00 to tell you whether or not you actually owed them anything.
  • The Delaware Division of Corporations is known for showing preferential treatment to certain registered agent service providers.[citation needed]

References

  1. ^ Delaware Division of Corporations
  2. ^ Delaware 2005 Fiscal Notebook - State General Fund Revenues by Category (F.Y. 2002 - F.Y. 2005)

External links


  Results from FactBites:
 
Delaware Corporation – Form a Delaware Corporation, Incorporate in Delaware now! (1909 words)
All corporations incorporated in the State of Delaware are required to file an Annual Franchise Tax report and to pay a franchise tax.
The Delaware General Corporation Law is the most advanced and flexible business formation statute in the nation.
The Delaware Court of Chancery is a unique 210 year old business court that has written most of the modern U.S. corporation case law.
Delaware corporation - Wikipedia, the free encyclopedia (350 words)
A Delaware corporation is a corporation chartered in the state of Delaware in the United States.
Delaware is well known as a corporate haven, and many major corporations are chartered in Delaware.
Critics of the predominance of Delaware corporate law believe that its laws and courts are excessively friendly to corporations.
  More results at FactBites »

 
 

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