Talk:Delaware General Corporation Law/Archives/2011

Ok, then, but why?

I've heard of many companies that have nothing really to do with Delaware incorporating in Delaware, which made me wonder - why? Why do 50% of the companies in America (according to this article) incorporate in this small state, and not another state? Unfortunately, the article doesn't really answer the question... It brings up just one plausable cause - a law allowing to charge more interest if your a DE corporation. But why should most corporations (who are not in the credit business) care about this? Aren't the downsides (like the higher fees) more important for most corporations? And if this is the only relevant difference, why can't some other state - Alaska, Montana, or even California just go ahead and change its interest law, and suddenly get back a lot of money (according to the article, 20% of DE's income is from all these companies registering there!). In short, it would be great if this article explained better why the situation exists that most corporations in America were, and still are being, registered in Delaware. Nyh 21:18, 26 May 2007 (UTC)

See the first sentence under "Legal benefits". Except for securities and bankruptcy law, corporate law in the US is state not federal law. Because Delaware's been the leader for so long, its courts have the most experience in dealing with complex corporate litigation. Courts in other states like NY and CA may have comparable experience, but the case law is probably not as economically liberal as DE. Wl219 21:37, 10 June 2007 (UTC)

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Would it be a good idea to add a list of high-profile 'Delaware corporations'?

No, since over half of publicly-traded corporations in the USA are incorporated in Delaware. For the largest corporations, the fraction is even greater. This is why I deleted the Silicon Valley paragraph. Delaware incorporation is so common and routine that it's not significant when corporations re-domicile there.--ArminTamzarian 03:34, 8 October 2005 (UTC)

I added the citations on 22:56, 31 May 2006 (UTC), I forgot to login--Hans 23:07, 31 May 2006 (UTC)

Operations of ?

"Currently, Delaware has operations of internationally-known banks", what does that mean? That they are incorporated there? - Jerryseinfeld 02:44, 21 Nov 2004 (UTC)

Yes. More precisely, the banks have created separate credit-card operations in the state, hence corporate names like the former Bank of New York (Delaware), Citigroup (Delaware), etc. -- Sensor 23:58, 25 Nov 2004 (UTC)

I added Dolby Laboratories to the list, considering the timeliness of their reincorporation.--Bigtex 03:57, 27 July 2005 (UTC)

Bermuda Corporations

I removed the following content regarding Bermuda corporations because Delaware is not in Bermuda, and thus it's not strictly relevant to the article. Although unsourced, it may be true.

Bermuda now appears to have superceded Delaware as the favourite domicile for US companies and International companies operating in the USA. Bermuda's corporate tax rate is zero ** (**presuming operations are intellectual and not physically done in the USA). This legal framework is very vague. Instead of zero taxes, companies operating in the USA pay obscene fees to the Bermuda government and landowners to smooth out everything. This is a legal loophole.

Since companies can operate in Bermuda (now mostly insurance/reinsurance) - US tax free - they have a competitive advantage against any US company. The US Republican administration seems to approve all of this as they likely prefer private control over who controls and taxes the USA versus government administrations.

Collabi 21:55, 12 April 2007 (UTC)

Legal Cites

This page, along with many others in the "Business Law" section, fail to cite to actual law. As a law student, I feel this might be necessary, if only in a general sense. I don't know enough about Wiki-editing to do the cites myself, or I'd do it. Please someone cite to the proper Delaware Corporate statues for these sections. Thanks. Jophus00 (talk) 02:19, 18 February 2008 (UTC)

That vs The

The last sentence of the intro paragraph read:

Over 50% of US publicly-traded corporations and 60% of the Fortune 500 companies are incorporated in the state.

I changed 'the' to 'that' to make more gramatical sense. To say 'the' implies that the statistic applies only to companies IN Delaware, ie) '60% of companies in Delaware are incporporated' vs '60% of companies in on the Fortune 500 list are incorporated in Delaware.'

See the difference?65.215.94.13 (talk) 15:35, 5 June 2009 (UTC)

Criticisms/attempt to change it?

I'm surprised no one (or no other state, or collection of states, or the federal government) has not tried to overturn this state of affairs at some point (it seems grossly unfair in terms of tax evasion); if there is such a history, or current efforts, I think it would be interesting to include another paragraph on the subject. Historian932 (talk) 04:43, 8 December 2009 (UTC)

100% taxes?

Regarding the claim (and the whole paragraph it's in):

Delaware often taxes as much as 100% of the bank's income in the state even if the bank does business in other states.[1]

For such a major claim we should have a good secondary source, that interprets case law for us. We shouldn't be directly reading and relying on individual cases, and writing about them. Otherwise, we're doing original research. And if you are going to cite a 42 page document, you need to say which page number supports the claim.

Regarding the whole paragraph, it needs to be much clearer. It says corporation not operating in the state pay no income tax. Do those operating in the state pay tax on income made outside the state? If not, where's the duplication? If they do, that should be made clear. It's also not clear if the paragraph is just talking about income tax, or some other types of tax. What's the top tax rate? --Rob (talk) 06:10, 23 March 2010 (UTC)

I agree. I'm not about to read the whole case for this small of a point, but just glancing at it I think this is an error in misreading it. The issue in the case is the amount of income that is taxable being 100% of the income, not the amount of the tax. A careful reading of the above actually says the same thing, but it's far from clear and could easily be misleading. Shadowjams (talk) 07:26, 23 March 2010 (UTC)

Is the Court of Chancery really a court of equity?

The article claims the Court of Chancery is a court of equity, and mentions the distinction between courts of law and of equity. But the author of this section doesn't say why he drew this conclusion. This is not stated in the Delaware Constitution, which creates the Court of Chancery and largely gives the legislature power to set its jurisdiction. Is there some other reason to call the Court of Chancery a court of equity? If not, I suggest deleting this section, and instead just cite to § 111, which specifies the Court of Chancery as the venue for cases over interpretation or governance of corporate charter documents, etc.

Delaware Court of Chancery also says the same thing, and cites one source that _says_ the court has equitable jurisdiction, but then it also cites the part of the state constitution giving the legislature power to define the Court's jurisdiction however it wants--without regard to law or equity.

Anseljh (talk) 05:10, 30 April 2010 (UTC)

The Court of Chancery in England was a court of equity and the term Chancery was used almost as an antonym to legal, and in a way synonymous with equity. Here's a quick cite that says exactly that it's a court of equity [2]. Shadowjams (talk) 06:18, 30 April 2010 (UTC)