ABOUT DELAWARE

 

Located on the Atlantic coast, halfway between New York and Washington D.C., Delaware is one of the smallest states in the US both in terms of its area and population. However, it is a major US corporate domicile: more than 380,000 companies are incorporated in Delaware including 60 percent of the Fortune 500 and 50 percent of the companies listed on the New York Stock Exchange. In October of 1992, Delaware law recognized Limited Liability Companies (LLC's). The LLC combines the best aspects of the Corporation and the Limited Partnership without many restrictions.

 

Advantages of Delaware LLC (Limited Liability Company)

 

1.  Reputable US Delaware Corporation Law. Delaware is recognized for its General Corporations Law which provides a stable legal platform. There is a Chancery Court which adjudicates on corporate matters. The courts do not use juries, so decisions are issued as written opinions and litigation is not settled by the emotions of a jury, but on stable law.

 

The company in Delaware can be operated and managed worldwide.

 

2. Delaware Limited Liability Company must have these words after the company name or the  abbreviation thereof i.e. "Limited Liability Company", "L.L.C.", or "LLC".

 

3.  A Delaware LLC may be owned by any national, regardless of place of residence.

 

4.  With Delaware company formation, a minimum of one shareholder and one director is required. The shareholder and director need not be residents of Delaware, can be of any nationality and can even be the same person. Single-person entities are authorized for Delaware incorporation. Furthermore, details of shareholders and directors are not available for public viewing.

 

5.  All positions in an LLC or a Corporation can be hold by one person.

 

6.  Nominee members can be used not to disclose the owners’ names to the state. The Delaware LLC is not required to report any assets.

 

7.  No minimum capital requirements for the Corporation and LLC

 

8.  An LLC does not issue shares and therefore does not have shareholders. The owners of an LLC are referred to as members.

 

9.  After Delaware offshore incorporation, the risk to an owner of a Delaware offshore LLC is to the extent of his investment in the LLC, and all his personal assets are protected.

 

10.  The structure of the LLC does not provide for a Board of Directors. The flexibility in the law allows the members by agreement, written or oral, to decide on the most appropriate management system and on the distribution of profits.

 

11.  Tax Savings: a.) If the business activities and registered office of the LLC are out of state, there are no state income tax. b.)pass-through taxation

 

12.  The IRS tax treatment of a Delaware LLC is on the flow-through tax basis. That is the LLC is not taxed on its profits. The income of the LLC is distributed to its members who are taxed on a personal income basis.

 

13.  Non-resident aliens are not taxable by the US on income derived out of the US. If an LLC derives its income outside of the US, the non-resident aliens do not file tax returns.

 

14.  A Delaware Limited Liability Company (LLC) is a good vehicle for non-resident aliens to earn tax free income (not derived in the USA), utilizing a US business entity.

 

15.  An Annual Report is required, which sets out the distribution of profits to US residents.

 

For further information or assistance, please feel free to contact us

 

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