Disney is a Delaware Based Corporation?

[hertamaniac]

In this week's episode, a quick inspection of a recent lawsuit against Disney showed that, apparently, Disney is a Delaware-based corporation.

I worked for a couple of start-ups and whenever we had to fill-out our grant/government/military funding applications, we also had to indicated that we were a Delaware based corporation. Are there tax/other advantages, legally, that warrants a company to incorporate in Delaware?

From Wikipedia...

The Delaware Court of Chancery focuses solely on business law and uses judges instead of juries. For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (but there is a franchise tax).

Sounds like a Corporation heavy leverage position for sure.

 

[GreatLakes]

SNIP...

Are there tax/other advantages, legally, that warrants a company to incorporate in Delaware?

...SNIP

Yes.

 

[SorcererHeidi]

Stupid question (I knew about no state tax, no tax on out of state pensions, which makes it such a popular place to retire - especially for former NJ public employees) , but does the fact that at least several (that I know of) big financial institutions/credit card companies also have a huge presence there also mean something? I know it's very evident, just from the windows of the Amtrak train, in Dover. Always figured so, just never looked into/asked.

 

[hertamaniac]

Stupid question (I knew about no state tax, no tax on out of state pensions, which makes it such a popular place to retire - especially for former NJ public employees) , but does the fact that at least several (that I know of) big financial institutions/credit card companies also have a huge presence there also mean something? I know it's very evident, just from the windows of the Amtrak train, in Dover. Always figured so, just never looked into/asked.

I was seeking factual information and not something that came across my statement from a CC company via e-mail or snail mail.

 

[TheMaxRebo]

In this week's episode, a quick inspection of a recent lawsuit against Disney showed that, apparently, Disney is a Delaware-based corporation.

I worked for a couple of start-ups and whenever we had to fill-out our grant/government/military funding applications, we also had to indicated that we were a Delaware based corporation. Are there tax/other advantages, legally, that warrants a company to incorporate in Delaware?

From Wikipedia...

The Delaware Court of Chancery focuses solely on business law and uses judges instead of juries. For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (but there is a franchise tax).

Sounds like a Corporation heavy leverage position for sure.

Those are the highlights - also relatively easy to form a company in Delaware. Basically, they wanted to lure business there and this is how they set it up to be corporate friendly

Other states do similar things and attract different types of business. I work in Insurance and New Hampshire has always been friendly to them and Rhode Island is trying to now be attractive with some of the laws they are changing- particularly about handling of reserves and retroactive reinsurance transactions

 

[acpalmer]

Hogwash! Not a stupid question at all, but fully warranted. Knowledge is bliss and I was seeking empirical observations or something that was not privy to my informational window. So, save the pseudo and assumption based response; I was seeking factual information and not something that came across my statement from a CC company via e-mail or snail mail.

I'm pretty sure she wasn't saying anything about your question, she was framing her own question about CC companies as potentially stupid and then explaining where her question came from. Maybe re-read what she posted with that in mind and perhaps you won't feel quite as defensive.

 

[MarkE83]

relatively easy to form a company in Delaware. Basically, they wanted to lure business there and this is how they set it up to be corporate friendly

Not just relatively easy- it’s commonly regarded as by far the easiest state to set a company up in. I live in the UK and a couple of years ago whilst working for an international patent / IP renewals company I needed to look into forming a US company so we could have a genuine US bank account so we could use the ACH clearing system. It didn’t take long for me to figure out that setting up a company in Delaware would be the way to go.

There’s many companies over here (UK) that will set up a US company for you without you ever setting foot in the US. The fees weren’t anywhere near what I was expecting; and they all incorporated in the same state

 

[SorcererHeidi]

Hogwash! Not a stupid question at all, but fully warranted. Knowledge is bliss and I was seeking empirical observations or something that was not privy to my informational window. So, save the pseudo and assumption based response; I was seeking factual information and not something that came across my statement from a CC company via e-mail or snail mail.

@hertamaniac Huh? Sorry, I'm truly at a loss.

 

[SorcererHeidi]

I'm pretty sure she wasn't saying anything about your question, she was framing her own question about CC companies as potentially stupid and then explaining where her question came from. Maybe re-read what she posted with that in mind and perhaps you won't feel quite as defensive.

Thank you @anne - I just posted how confused I am. You read me totally right - was nothing malicious in my response at all, was truly asking my own question, about the same state.

 

[marcyleecorgan]

I was told by relatives that there is far more business on paper in Delaware than there ever could be room for the buildings...

 

[AdamEfimoff]

In this week's episode, a quick inspection of a recent lawsuit against Disney showed that, apparently, Disney is a Delaware-based corporation.

I worked for a couple of start-ups and whenever we had to fill-out our grant/government/military funding applications, we also had to indicated that we were a Delaware based corporation. Are there tax/other advantages, legally, that warrants a company to incorporate in Delaware?

From Wikipedia...

The Delaware Court of Chancery focuses solely on business law and uses judges instead of juries. For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (but there is a franchise tax).

Sounds like a Corporation heavy leverage position for sure.

and Mandarin Oriental is based in the Bahamas . Tax Haven stench is everywhere

 

[hertamaniac]

I'm pretty sure she wasn't saying anything about your question, she was framing her own question about CC companies as potentially stupid and then explaining where her question came from. Maybe re-read what she posted with that in mind and perhaps you won't feel quite as defensive.

Perhaps.

 

[Sweettears]

Along side of the ease of setting up a corporation there are other benefits. One is that Delaware has been pro corporate for a long time and has a huge basis of prior case law generally in favor of corporations if they are to enter litigation. Also, at one time, they were the least expensive state as far as franchise tax assessment. Other states are trying to make inroads on Delaware as time progresses but the huge amount of prior case law remains a big deal.

 

[hertamaniac]

@hertamaniac Huh? Sorry, I'm truly at a loss.

Only looking for extended clarification or edification. I was hoping to induce a "Readers Digest" version encapsulating what advantages a corporation has in incorporating in Delaware.

I can Google/search with the best of them, but looking for more experienced responses in case law.

 

[SorcererHeidi]

Only looking for extended clarification or edification. I was hoping to induce a "Readers Digest" version encapsulating what advantages a corporation has in incorporating in Delaware.

I can Google/search with the best of them, but looking for more experienced responses in case law.

And I truly support your search, and hope you know I was talking about MY question/wondering about credit card companies being "stupid", NOT yours. Never even considered that, and was pretty taken aback when Anne made me realize that's probably what you thought.

 

[Sweettears]

And I truly support your search, and hope you know I was talking about MY question/wondering about credit card companies being "stupid", NOT yours. Never even considered that, and was pretty taken aback when Anne made me realize that's probably what you thought.

Most credit cards companies are based out of the Dakatos now days as they have the most favorable laws. Not sure but I believe they rely on arbitration which is favorable to the corporations.

 

[Alicenwonderment]

Those are the highlights - also relatively easy to form a company in Delaware. Basically, they wanted to lure business there and this is how they set it up to be corporate friendly

Other states do similar things and attract different types of business. I work in Insurance and New Hampshire has always been friendly to them and Rhode Island is trying to now be attractive with some of the laws they are changing- particularly about handling of reserves and retroactive reinsurance transactions

Are you saying NH has always been friendly to Insurance bus? Auto insurance I can see. I think we are one of the only states that have a yearly policy. I think I've picked up on that because I have USAA and I have to remind them that my policy is yearly. Health insurance not as much from what I've seen. Yes, NH has many factors that attract business. No income tax, no sales tax, etc. Our Govt actually put together a bid for Amazon this summer regarding their new facility (never heard who was awarded the contract). Many other states were offering exemptions on taxes etc but NH didn't have to offer breaks from those taxes because we don't have them in the first place. NH gets their money from alcohol sales(All borders have state liquor stores) and property taxes are pretty high too. NH also benefits from boarding states crossing the border to spend money. Can't tell you how long the line is at the Apple Store. At first when I saw it I thought it was a line to get in the store but an employee said those people buy in bulk. Many are from MA so they aren't paying the required sales tax.

Yes, I would also like to get a legal explanation too.

 

[GreatLakes]

I was told by relatives that there is far more business on paper in Delaware than there ever could be room for the buildings...

Many of the companies incorporated in Delaware have no actual physical presence beyond a mailing address. Mail gets gathered and sent to the actual headquarters in other states.

 

[woodleygrrl]

Most companies are incorporated in Delaware. There are legal and tax advantages in doing so. There are exceptions. One is most public REITS (real estate investment trusts) are incorporated in MD for a similar reason.

Now being incorporated does not mean they have a headquarters there. Most times they only have a mail box there and not an actual office.

I know all of this because it is a large part of my job interacting with public companies regarding corporate governance issues.

 

[Sweettears]

Many of the companies incorporated in Delaware have no actual physical presence beyond a mailing address. Mail gets gathered and sent to the actual headquarters in other states.

Actually there is no need or requirement to have a mailing address in Delaware. It’s sole purpose is the state of registration and where fees and taxes are payable.