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Great story. Short, sweet and to the point.
Not to mention, Delaware is the biggest tax haven state in the country, with 68% of Fortune 500 companies organized in the state.
They are incorporated there, but most have their headquarters elsewhere.
Great decision!!
Delaware is the state of incorporation for the 68% of Fortune 500 companies because it has corporate laws and chancery courts specific for businesses unlike most states. Other states have imitated recently but Delaware has had a decades headstart on those companies.
Delaware is not really a tax haven since being incorporated there does not mean that you avoid taxes in the other states and countries that you have facilities and do business in.
Taxes are not the reason most companies incorporate in Delaware, though it has some influence. As noted, most companies incorporated have their headquarters elsewhere, and the headquarters state will usually impose taxes of some sort.
The reason to incorporate in Delaware is a statutory and legal system that is friendly to corporations, and a special set of courts (the Chancery Courts) that focus on corporate legal issues. Judges that understand corporate law and corporate lawsuits are very attractive to large corporations, who often struggle to explain corporate law to former family law and criminal court lawyers who are now judges.
Thank you for this background.
Excellent info. Thank you. Any clue why no other States have figured this out and followed suit?