Registration of Company in USA Delaware

The state of Delaware in the USA is considered as one of the most popular jurisdictions for company registration. The capital of the state is the city of Dover.

Why is it cost-effective to register company in Delaware?

Today, the company in Delaware is one of the cheapest in terms of registration costs. And the process of establishing the company is quick and simple.

Holding companies, investment companies, which place of doing business is located outside the territory of the state, do not pay income tax. This circumstance attracts many business owners. It should be noted that the income tax rate for companies doing business in the state is 8.7% and is considered to be one of the highest in the USA.

The situation in which the tax rate in the state of Delaware equals to 0% will be considered further. But why Delaware is so attractive for company registration?

The registration of companies in Delaware is popular because of state legislation based on the concept of consideration of each individual case by the court ex aequo et bono, and not through the application of existing precedents.

The state legislation allows the registered company in Delaware to operate without entering information about it to the tax authorities in the case of doing business outside the United States.

The legislative framework

The regulatory basis of the companies’ activity in Delaware is such legal act of the state (that is a section of the state statutes) as "General Corporate Law".

According to its provisions, directors, founders, as well as executive management of the company receive broad powers in resolving issues concerning structure of the company and management of corporate affairs.

All conditions are provided in the state for business to be prosperous with minimal interference from outside. In addition, there is minimum of legislative requirements with regard to the Charter, the certificate, and other documents of the company.

Prevalent organizational and legal forms in Delaware

Most of companies in Delaware are being established in the following organizational and legal forms:

• Limited Liability Company (LLC),

• C Corporation - non-residents can establish only this form of corporation;

• S Corporation.

These entities can be used as offshore companies in Delaware. Non-residents of the United States of America have the right to register or buy the indicated companies. The business of offshore enterprises in the state of Delaware is conducted exclusively outside the territory of jurisdiction.

Registration of Corporation in Delaware. Peculiarities

• Non-resident founders can establish only C-Corporation;
• Minimum amount of the authorized capital is not determined. The law allows not to pay the statutory fund for the period of up to 3 years.
• At least one shareholder and director is required to register the corporation in Delaware. There are no formal requirements for these persons.
• Company registration in Delaware is conducted in electronic format without the presence of founders.
• It is not necessary to fix the names of the owners of the company being registered.
• lIt is allowed to control the organization without disclosing information about the person who exercises substantial control. There is no control over the procedure for holding meetings of shareholders;
• lIt is possible to combine the position of the owner with any other position in the company.
• lBearer shares are prohibited. Owners can freely buy, sell and transfer the issued shares. The company may own shares and assets of the other corporations, and property within the state and outside.
• lShareholders are liable for their obligations according to the amount of shares owned by them. It is possible to pay surplus dividends.
• lIf the company tends to conduct its activities in the territory of the jurisdiction, it is necessary to fill out special form.
• lIt is necessary to have legal address and registered agent who will receive correspondence with regards to the company from state authorities.
• lAccounting records can be stored outside of Delaware.
• lThe company name should contain organizational and legal form or its abbreviation and should not include words related to the types of activities subject to licensing.

Bookkeeping in the state of Delaware

The company registered in the state of Delaware shall submit annual report 12 months after registration. Annual report is required in cases when profits are allocated between US residents.

If the company does not have Tax ID and economic activity in the state, then it is possible not to submit certain reports, except for accounting activities and reflecting financial transactions.

The company submits annual report to the Department of Internal Expenses (through the registered agent), maintains accounting records only in the case of tax registration in the United States.

Taxes in Delaware

If the company does not own property and does not operate in the United States, the tax rate equals to 0%. In other cases, income tax will be 8.7%. It is also necessary to take into account the tax on monopoly rights and privileges, which equals to 1% of the authorized capital and is paid in case of availability of employees who are the residents of the state.

Companies are exempt from taxes on transactions with shares, deposits in state banks and deals with companies from low-tax or tax-free jurisdictions.

Only companies having tax registration and receiving income in the territory of the jurisdiction pay federal corporate income tax that is 34%.

In order to maintain positive image of the company, some owners pay minimum taxes and annual fees. The reporting is submitted with the help of firms providing secretarial services. This allows owners to remain in good standing with the state secretariat.

We will register ready-made company in the USA in the state of Delaware for you within the shortest time possible. Registration of company in the USA in Delaware is one of the simplest and cheapest ways to start legitimate international business. Registration of companies is one of the main directions of our work.