Icon image of white palm tree shape from logo
FLORIDA ENTREPRENEUR LAW

3 Myths About Incorporating Your Business in Delaware

Oct 3, 2019 | Articles

You may have heard that incorporating in Delaware is a good idea for any business. Delaware is famous among business owners for its generally favorable business laws, and you will see many companies that choose to incorporate there.

However, that does not automatically mean that it is a good idea for your particular business. It is not a one-size-fits-all solution, and it may not be the right fit for your company.

Below are some of the common myths that you may have heard about incorporating in Delaware, and the truth behind those myths.

The Myths

– It is easier to incorporate in Delaware compared to any other state. This myth is actually partially true. It is very easy to incorporate in Delaware, and you do not have to be physically present in the state to incorporate there.
However, even if you incorporate in Delaware, you will still have to register as a foreign entity doing business in Florida or any other state where you provide goods and services. That means that the time and money that you saved by incorporating in Delaware is mostly wasted because you still have to register to do business in your own state. Then, you also have to comply with registration and ongoing reporting requirements in two states, rather than just one.

– Delaware has very little regulation over its businesses, making them an attractive place to incorporate. This is absolutely false. While Delaware’s laws regarding boards of directors and investors are more flexible than most states, the notion that they have fewer laws or regulations simply is not true. Delaware still has laws that address formation, environmental laws, worker safety, discrimination, and more.
Instead, Delaware has developed a completely separate court system to address business issues. Those conflicts are resolved by a judge, not a jury. These specialized judges have a good background of codified laws and case law to rely upon in issuing their decisions.

– Companies that incorporate in Delaware pay less in taxes. In general, a corporation will pay the same federal taxes no matter where it is incorporated. That means that there are no tax savings, at least on federal taxes, by incorporating in Delaware.
Although Delaware’s state income taxes are generally considered reasonable, they still do not compare to having to pay very little state income tax for your business in Florida. For companies that do not incorporate (using a C-corp structure), there is no state income tax in Florida—which is a huge saving no matter how you look at it.

By incorporating in Delaware, you may end up committing to having to pay state taxes in Delaware, even if you technically do no business in the state. For Florida businesses, that is certainly not a tax saving—it is a tax increase.

Deciding Where to Incorporate or Start Your Business

Incorporating your business is a big decision, and for some companies, using the favorable Delaware laws may make sense. For others, using Delaware as your “home state” is just an added expense and administrative headache. Which is it for your company? Florida Entrepreneur Law, PA can help you decide. Call today to set up an appointment or to learn more about how we can help: 954-800-0484.

Icon image of white palm tree shape from logo

Testimonials

"Wow! What can I say. Michelle was amazing with us. I met Michelle through a networking contact and was not disappointed one bit. We needed advice on our business lease and she was right there to help us through it. She responded so quickly and completed the project efficiently with professionalism, honesty and transparency.

It is rare to find professionals who care and are completely honest with you from the start and understand that starting a new business is intimidating at times. Michelle is one of these rare lawyers who took the time and made us feel like VIPs. This may be the first time we used her services, but definitely not the last!"

- Anna Lamothe

"I met Michelle and Amanda at an event in January 2021. My first thoughts were the universe aligned. I didn't know I was going to need a business lawyer for my first LLC. There was and is so much I don't know when it comes to business ownership. I wanted to ensure I did things the right way. They have been a pleasure to work with thus far. I am grateful for their transparency. True professionalism, work ethics, and helping my business partner and I through the process. Amanda has also helped me form my second LLC as well. Who knew! I would highly recommend them if you are starting and LLC or at any part of the process."

- Camille Ali

"Michelle is an amazing attorney. She is very knowledgeable and resourceful. She has helped me with two different legal subjects for my business and was prompt and professional. She is definitely an ally to the business owner. I highly recommend her."

- Patricia Clawson

"As an attorney I'm very particular about who I send my clients to because it's a reflection on me. With that being said, I completely trust in Michelle's ability to work diligently and efficiently - she truly knows her stuff. Michelle is an attorney who takes pride in her craft and really cares about her client. If you're starting a business, looking to develop your business or the like - this is your attorney. She is an expert in her field!"

- Christine A. Schafer

"I have nothing but positive things to say about Michelle and her firm! She was not only able to win my case but during the whole process she demonstrated how passionate and professional she is. She took my case and made it her own. If you’re looking for a professional and compromised attorney, she’s the one! I recommend her 100%!"

- Luz Reina

"I have been very lucky to work with Amanda over the last few years. She is beyond professional and knowledgable. As a seasoned real estate investor, i have some legal entanglements, and Amanda solved the problems in a timely manner and her service went above and beyond."

- Anish Dave

"I recently had a consultation with Michelle Suarez, Esq in regards to a dispute within my corporation and I am very pleased with her services. Michelle works fast! We were able to set up our initial consultation within a few days of connecting.

Michelle was on time, prepared for the call, professional, and straight to the point (which I really appreciated)! She is extremely knowledgeable and took the time to listen to my concerns and provide me with as much information as I needed so that I could make an informed decision. Highly recommend!"

- Marissa Case

"I hired Michelle to handle a situation where I quit my job and started my own business. She helped me through the process of setting up my company and then also represented me in a dispute I had with my former employer. We were successful in that dispute, thanks to Michelle’s hard work.

It was so easy to set up my consultation, her turnaround time was super fast, and I could always reach her about any questions I had. I had a great experience with her and I will go to her in the future for any other business needs my company has."

- Omar Dodero

"I was referred to Michelle and we were beyond pleased with her services. She was aggressive, professional and always available to answer any questions or concerns I had. My case had a positive outcome and I cant thank her enough. Without her knowledge and quick work I'm not sure things would of ended up in my favor. I would most definitely recommend her for all your legal needs. She truly cares for her clients and she works very hard to get you positive results."

- Cassy Longsworth

"I'm a lawyer myself, but I do not practice business law. Michelle is my go-to lawyer for all my business law needs. I also recommend her to my friends and my immigration clients when they need business advice. I only recommend professionals who I know to be honest, responsive, fair, and smart (I do NOT accept referral fees from other lawyers). So many lawyers are lazy, incompetent, and overcharge you. They don't answer your questions or they let their staff do it all and you never hear from your actual lawyer again. Michelle will pay close attention to your case and charge you fairly for her superior work. Thank you Michelle!"

- Jill E. Grucan, Esq.

Image of logo for Google Reviews

Call us at (954) 800-0484 for a consultation