Content deleted Content added
Remove non-neutral qualifier |
Thenightaway (talk | contribs) No edit summary |
||
| (13 intermediate revisions by 12 users not shown) | |||
Line 2:
{{Corporate law|USA}}
The '''Delaware General Corporation Law''' (Title 8, Chapter 1 of the Delaware Code) is the [[statute]] of the Delaware Code that governs [[corporate law]] in the [[U.S. state]] of [[Delaware]].<ref>{{cite web |title=Delaware General Corporation Law |url=http://delcode.delaware.gov/title8/c001/ |website=Delaware Code Online |access-date=21 December 2018}}</ref> The statute was adopted in 1899. Since then, Delaware has become the most prevalent jurisdiction in [[United States corporate law]] and has been described as the ''de facto'' corporate capital of the United States.<ref name=":0">{{Cite book |last=Weitzman |first=Hal |url=https://books.google.com/books/about/What_s_the_Matter_with_Delaware.html?id=xnPMEAAAQBAJ&source=kp_book_description&redir_esc=y |title=What’s the Matter with Delaware?: How the First State Has Favored the Rich, Powerful, and Criminal—and How It Costs Us All |date=2024 |publisher=Princeton University Press |isbn=978-0-691-23574-5 |language=en}}</ref>
Delaware is considered a [[corporate haven]] because of its business-friendly corporate laws compared to most other U.S. states.<ref>{{cite news |url=https://www.nytimes.com/2012/07/01/business/how-delaware-thrives-as-a-corporate-tax-haven.html |title=How Delaware Thrives as a Corporate Tax Haven |newspaper=The New York Times|date=30 June 2012}}</ref><ref name=":0" /> 66% of the [[Fortune 500|''Fortune'' 500]], including [[Walmart]] and [[Apple Inc.|Apple]] The statute has been credited with reducing the tax burdens on Delaware residents as revenues from the statute provide two-fifths of the state's budget, but has been controversial for facilitating [[tax dodging]] and [[money laundering]] by major corporations, as well as providing safe haven to money launderers, kleptocratic foreign rulers, and human traffickers.<ref name=":0" />
==History==
Line 15 ⟶ 19:
Pursuant to the "[[internal affairs doctrine]]", corporations which act in more than one state are subject only to the laws of their state of incorporation with regard to the regulation of the internal affairs of the corporation.<ref>''Edgar v. MITE Corp'', {{ussc|457|624|1982}}.</ref> As a result, Delaware corporations are subject almost exclusively to Delaware law, even when they do business in other states.
While most states require a for-profit corporation to have at least one director and two officers, Delaware laws do not have this restriction.<ref name="Reuters_DECorp">{{cite web|title=DEL CODE § 141 : Delaware Code
==Tax benefits and burdens==
Delaware charges no [[income tax]] on corporations not operating within the state, so taking advantage of Delaware's other benefits does not result in taxation.<ref>{{cite web| url = http://corplaw.delaware.gov/delaware_law.shtml| url-status = dead| archive-url = https://web.archive.org/web/20131213044718/http://corplaw.delaware.gov/delaware_law.shtml| archive-date = 2013-12-13| title = State of Delaware
In addition, Delaware has used its position as the state of incorporation to generate revenue from its abandoned and unclaimed property laws. Under U.S. Supreme Court precedent, the state of incorporation gets to keep any [[Lost, mislaid, and abandoned property|abandoned and unclaimed property]], such as uncashed checks and unredeemed gift certificates, if the corporation does not have information about the location of the owner of the property.<ref name="auto">{{cite web |url=http://finance.delaware.gov/publications/fiscal_notebook_07/Section02/sec2page24.pdf |title=State General Fund Revenues by Category (F.Y. 2002
Delaware charges a [[franchise tax]] on the corporations incorporated in it. Franchise taxes in Delaware are higher than in most other states which typically get revenue from corporate income taxes on the portion of the corporation's business done in that state. Delaware's franchise taxes supply about one-fifth of its state revenue.<ref name="auto"/>
Line 27 ⟶ 31:
==2013 amendments==
On June 30, 2013, Delaware Governor [[Jack Markell]] signed amendments to the Delaware General Corporation Law. The new legislation took effect on August 1, 2013, except for the ratification of the defective corporate acts amendment which took effect in 2014.<ref>{{cite journal|url=http://www.hklaw.com/publications/Significant-Amendments-to-Delaware-General-Corporation-Law-Enacted-08-05-2013/ |archive-url=https://archive.today/20130806234639/http://www.hklaw.com/publications/Significant-Amendments-to-Delaware-General-Corporation-Law-Enacted-08-05-2013/ |url-status=dead |archive-date=August 6, 2013 |title=Significant Amendments to Delaware General Corporation Law Enacted |journal=Holland & Knight Securities Bulletin |date=August 5, 2013 }}</ref>
== Securities law ==
In 2020, the Delaware Supreme Court upheld a provision allowing companies to require in their [[Certificate of incorporation|certificates of incorporation]] all [[Securities Act of 1933]] claims to be filed in federal court.<ref>{{Cite web|title=Delaware Supreme Court Validates Federal Forum Provisions
DGCL 203<ref>{{Cite journal|last=Nugent|first=Eileen T.|date=2010|title=A Timely Look at DGCL Section 203|url=http://www.jstor.org/stable/40688595|journal=The Business Lawyer|volume=65|issue=3|pages=753–759|jstor=40688595|issn=0007-6899}}</ref> is particularly known as an [[Takeover|antitakeover]] law.
Line 51 ⟶ 55:
==External links==
*[https://corp.delaware.gov/ Delaware Department of State, Division of Corporations]
*[http://delcode.delaware.gov/title8/c001/index.shtml Delaware's General Corporation Law]
*[http://www.corp.delaware.gov/ Delaware Division of Corporations]
| |||