Description of
Corporations Organized in Delaware
Before deciding
which type of corporation best suits your business needs, always consult with
your legal or financial advisors. Global Corporate Services, Inc. is a
registered agent in the State of Delaware and does not offer legal or tax
advice. We are here to help you start your new business as quickly and cost
effectively as possible.
For more detailed
information, please be sure to speak with a qualified legal and/or financial
advisor. You may address your questions to our
Tax and Accounting Services at tax@delawarecorp.us.
General Corporation
The general
corporation is the most common corporate structure. This type of corporation is
a separate legal entity that is owned by stockholders. A general corporation may
have an unlimited number of stockholders that, due to the separate legal nature
of the corporation, are protected from the creditors of the business. A
stockholder's personal liability is usually limited to the amount of investment
in the corporation and no more.
Advantages
-
Owners' personal
assets are protected from business debt and liability
-
Corporations
have unlimited life extending beyond the illness or death of the owners
-
Tax free
benefits such as insurance, travel, and retirement plan deductions
-
Transfer of ownership
facilitated by sale of shares
of stock owned by individuals outside the State are not subject to any
Delaware taxes.
-
Shares of stock
owned by individuals outside the State are not subject to any Delaware taxes.
-
Change of
ownership need not affect shares of stock owned by individuals outside the
State are not subject to any Delaware taxes. management
-
Shares of stock
owned by individuals outside the State are not subject to any Delaware taxes.
-
Easier to raise
capital through sale of stocks and bonds
Disadvantages
Close Corporation
There are a few
minor, but significant, differences between general corporations and close
corporations. In most states where they are recognized, close corporations are
limited to 30 to 50 stockholders. In addition, many close corporation statutes
require that the directors of a close corporation must first offer the shares to
existing stockholders before selling to new shareholders.
This type of
corporation is particularly well suited for a group of individuals who will own
the corporation with some members actively involved in the management and other
members only involved on a limited or indirect level.
To be
incorporated the name of the corporation must include one of the following:
- Incorporated or Inc.
- Corporation or Corp.
- Association
- Institute
- Union
- Limited or Ltd.
- Club
- Foundation
- Fund
- Society
- Syndicate
Non
Stock - Not for Profit Corporation
Limited Liability
Company
Series LLC
Shelf
Corporation
You may address
your tax questions to our
Tax and Accounting Services at tax@delawarecorp.us.