Is Delaware always the best state to open a company in the US?

The very opening of a company in the US, if done in Delaware, costs less than $100.

For a foreign entrepreneur wishing to open a company in the United States, LLC and C-Corp are the most attractive corporate forms.

Delaware’s tax and fiscal regulations are also aimed at protecting directors, thanks to the power to limit their responsibilities and establish forms of compensation in their favor. The same faculties can also be extended to managers and employees.

Delaware also offers companies an effective management of judicial disputes, thanks to an independent judicial system which provides that the unraveling of disputes relating to commercial law is the responsibility of the judges and not the popular juries.

The advantage is that of entrusting one’s disputes to a competent body with experience and preparation in the specific sector, as a guarantee of decisions issued taking into account the judgment of persons professionally competent in legal-commercial matters. You just need to obtain an ITIN number.

Furthermore, the decisions of these judges make jurisprudence and are considered as forms of orientation to be taken into account in future disputes. Based on these guidelines, decisions for each new dispute are made in a very short time. This mechanism means that disputes have been reduced to a minimum over the years.

For a company that wants to start doing business in the USA, these aspects are priority and often turn out to be the most important decisive points for the choice of the place of incorporation.

Last but not least, the decision to open a company in Delaware, in the territory of the United States of America, is influenced by the protection of the privacy of shareholders and administrators, preventing their personal data from being transcribed in the documentation filed with state authorities. Obviously, in the event of an offense and only for proceedings initiated by the authorities, this form of protection fails.

All the characteristics described up to now, could suggest that Delaware is the best place to open a company in the USA. But the reality of the facts and previous experiences indicates that it is not the best choice for all those companies and companies in the start-up phase (so-called start-up). This is because the legislation of this state is aimed at attracting as many high-profiles and prestigious companies as possible, especially of European origin.

Consequently, all the advantages and concessions reserved for this type of company do not find corresponding benefits if it is the small business that wants to take advantage of them, for which it will be possible to find equal facilities in the other member states of the USA.

In conclusion, large companies listed on the stock exchange or with the intention of going public will find it convenient to open an incorporate company in USA in Delaware, while start-ups and small companies that are not listed on the stock exchange and that do not even intend to go public, they will be able to choose other states, perhaps with the precious help of a specialized consultancy firm.