Delaware Corporate Law Firms
Delaware is the most popular state in the U.S. for incorporation. Delaware corporate law is very favorable toward corporations. A company that is incorporated in Delaware, but does not operate in the state, does not pay state income tax. Delaware General Corporation Law is the most well-known corporation law in the country, and many states have modeled their own corporation law after it.
Delaware General Corporation Law
While the statutes themselves are quite common, and thought of as the standard, the way that the law is applied is often very different in each state. Delaware has the largest body of corporate case law, which is often more meaningful than the statutes.
Most, if not all, lawyers in the U.S. who practice corporate law are very familiar with the language of Delaware General Corporation Law, but this familiarity in no way replaces experience with the process in Delaware, that only a seasoned Delaware corporate law attorney can bring to the table.
Delaware Court of Chancery
The Delaware Court of Chancery is a court of equity, rather than a court of law, and it hears disputes regarding the internal affairs of Delaware Corporations. There is no jury; all cases are tried before the Chancellor of Vice Chancellor.
Although there is no state income tax on corporations that do not operate in Delaware, the state profits from corporations in other ways. Delaware has a very high franchise tax. Franchise tax is not based on income, but on the net worth of the corporation.
Unclaimed property is another source of revenue for Delaware and one of the benefits of being the state of incorporation for such a large portion of the businesses in this country. The U.S. Supreme Court has rule that any unclaimed property must be given to the state of incorporation.
Unclaimed property includes checks which have not been cashed, gift certificates which have not been used, stocks, bonds, dividends, and more. Depending on the type of property, the dormancy period is three or five years.
Delaware companies are required to report and turn over unclaimed property on an annual basis. Failure to do so can result in interest and penalties. Delaware enforces this requirement aggressively, and a corporation can be held liable for unreported unclaimed property from as far back as 1981. There is no statute of limitations.