Posts Tagged ‘Debt’

Delaware vs. Nevada vs. Wyoming

September 28th, 2022

Delaware is good for big business

In general, Delaware, through its developed legal system and laws protecting shareholder rights, is geared toward the large complex public corporation, whereas and Wyoming are more attractive to the small privately held corporation. Delaware law tends to protect the rights of boards of directors and shareholders, while Nevada and Wyoming tend to favor management.

Does it mean Delaware is not the best place to incorporate your new business? Not necessarily. The choice to incorporate in Delaware depends on the long term goals of your corporation.

Delaware has an excellent body of corporate case law spanning 110 years regarding such matters as management / shareholder issues and mergers / acquisitions, and that’s precisely why the Fortune 500 are drawn to this state. Delaware laws tend to be “pro-management” when it comes to minority shareholder disputes. Huge public companies have literally hundreds of such disputes pending in the courts on any given day.

So if you are aiming to grow your company to become a Fortune 500 company (or at least planning it to attract VC investors and possibly go for IPO one day), Delaware’s case law offers many insights into what you can and cannot do, and what the likely consequences may be.