What is the benefit of incorporating in Delaware?

What is the benefit of incorporating in Delaware?

For a small business, the main benefit can be summed up in a single word, mobility.

Let’s say, for example, that you’re a writer living in New York, and you form a New York corporation. Later, when you move to California, you have to qualify the New York corporation to do business in California. When you do that, you wind up obligating yourself to pay both the California franchise taxes as well as the New York fees and taxes (because that’s where you formed your corporation).

Now, let’s say instead that you would have formed a corporation in Delaware. You could have qualified that corporation to do business in New York; and when you left New York, surrendered the right to do business there and qualified to do business in California. It allows you to pick up and move your corporation wherever you move across the country.

Why Delaware?

It would work in virtually any state, but Delaware has very low annual fees and no obligation to file an annual tax return. So the opportunity to use it as the jurisdiction of formation [lies in the fact] that it is the cheapest on an annual basis.