On the other hand, most of the companies registered in Delaware are not trying to dodge US federal regulations. Polymarket is prohibited from operating in the US market. Nevertheless they have a substantial customer base in the US, and the part left unsaid in the NPR story, is that they’re probably also headquartered in the US. Almost definitely a violation of either gambling or securities regulations.

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trollbridge 3 hours ago | parent | next [-]

They are often trying to dodge their local state’s regulations, though.

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adrr 2 hours ago | parent | next [-]

No. Its because has chancery court which is a court based on equity not a court based on common law.

	▲	skissane an hour ago \| parent [-]
		> No. Its because has chancery court which is a court based on equity not a court based on common law. This is somewhat confused. Most common law jurisdictions merged their courts of law and courts of equity into a single unified court system long-ago; Delaware is unusual in not having done so But if you bring an equitable cause of action, courts in other jurisdictions will apply equity to decide it. And Delaware’s Court of Chancery applies common law as well. There are real advantages to Delaware’s judicial system from a corporate perspective-a specialised court system can be more responsive because it isn’t weighed down with other types of cases, doesn’t have juries, offers judges with deep experience in that specific area of law, etc. But it isn’t purely due to keeping separate equity courts; other jurisdictions could get similar results by establishing specialised courts for particular types of cases, without necessarily having to rely on the old law-vs-equity jurisdiction to draw the line.

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_--__--__ 3 hours ago | parent | prev | next [-]

Incorporating in Delaware was initially attractive because of usury laws that matter to a small number of business sectors.

The charitable take is that most corporations want to comply with a state's regulations because unintentional compliance violations are painful and expensive, and it is relatively easy to be confident that you are compliant as a Delaware corp.

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kelnos 37 minutes ago | parent | next [-]

Not sure about initially, but the big benefit to Delaware today is essentially network effects: so many companies are and have been incorporated in Delaware that there is a mountain of case law and precedent, so corporate legal teams can have a very good idea of how rulings will go if the company is taken to court under Delaware law. The state's judicial system is also set up very well at this point to handle the cases put in front of it.

(It also doesn't hurt that most businesses also find Delaware's business law to be reasonably fair and advantageous. Musk notwithstanding, of course.)

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eichin 2 hours ago | parent | prev [-]

When I last did it, there were two wins for a tech startup incorporating in delaware:

* it's easy and well-documented - the main thing you have to remember is to check the boxes that say this is an actual company, and not a holding company for a boat (where the real tax dodging is)

* it was reported to make acquisitions easier (as the company acquiring you would either also be a Delaware corp or it would be more straightforward even if they weren't.)

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kube-system 2 hours ago | parent [-]

Yes it is highly preferable for mergers/acquisitions/financing because the law is well established and widely known in those industries.

If you run into some legal question somewhere down the line, investors and their lawyers will be much more comfortable with Delaware law than some other state who may not have clear language on the books and/or have never tested that particular situation in court before.

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detourdog 44 minutes ago | parent [-]

That is really a wild thing. A culture of legal belief based on precedent. It's as if one is joining a club that has rules of business conduct clearly documented.

	▲	kelnos 35 minutes ago \| parent [-]
		That doesn't seem wild at all. Laws are written by humans, and, as such, there's inherent ambiguity. Given that, would you rather have a case tried in a court that has only tried a handful of other cases, or would you rather be in a court that has handled a mountain of cases, with lots of information as to what the law really means, as it has played out in real-life scenarios? Being tried under a legal regime where there is a ton of past history seems a lot easier to reason about than one where there isn't much. > It's as if one is joining a club that has rules of business conduct clearly documented. Well, yes. The law is the law, sure, but the "documentation" is much more than just the law, as written.

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dhosek 2 hours ago | parent | prev [-]

When I had a C-corp in the 90s for a magazine I was publishing, my dad’s cousin insisted that I should incorporate in Delaware or Nevada. The thing is that because I was operating in California, especially at the small scale that I operated, it did nothing for me at all really. I would still pay California taxes and be subject to California regulations. Mostly it would make a difference if I were sued.

(Obligatory disclaimer that these are ~30-year-old memories of some dumb 20-something’s understanding of the law at the time.)

	▲	nickff an hour ago \| parent [-]
		It might also make a significant difference if you sold the company, which is one reason why many companies move to Delaware when they are looking for an acquirer.

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mywacaday 3 hours ago | parent | prev | next [-]

I used to work for a large financial services company who bought 4 storey office block and fitted it out with very small but with own door individual offices that had internet and a connected desk phone so that companies could rent them and say they had more than a box office address in that European capital, I never found out what the rent was.

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pear01 3 hours ago | parent | prev [-]

Polymarket is already working on a full return to the US market aided by sympathetic policy changes of the current administration.

Additionally, the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious. Every company seeks to lower its regulatory burden. If they're not finding loopholes, then often they're the ones writing the regulations and funding congressional campaigns. I'm not sure the claim Polymarket is unique re its relationship to the government in this respect is credible. They seem to be working quite intimately with the current administration on returning from their Biden era "ban".

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kelnos 27 minutes ago | parent | next [-]

> the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious.

Why would it? Choosing the state to incorporate in has very little to do with US federal regulations. If the US wants to come after your company for some reason, they file in federal court, and the state you're incorporated in is irrelevant.

When incorporating, you choose the state based on its business-related laws and how they might apply to your company. You choose based on the experience of their judicial system in handling business matters. You might choose because there are a ton of other businesses incorporated in that state, and that's created a lot of court cases and a lot of precedent that can give your own legal team more confidence in how different sorts of legal challenge might play out.

If you were trying to avoid US federal regulations, you might incorporate in Delaware for the simple reason that Delaware is a safe default, given how common it is for companies to incorporate there. Incorporating in an unusual state could raise an eyebrow here or there. But ultimately it's not going to matter all that much. And even if it's true that a federal-regulations-skirting company would have a measurable benefit to incorporating in Delaware, there's no reason to believe that lots of companies incorporated in Delaware are trying to skirt federal regulations. That's just an unfounded assertion.

As an aside, it's not true that every company wants to decrease its regulatory burden. Once a company gets large enough, lobbying for extra regulation can be a barrier to entry for possible competitors. Also consider that "reducing regulatory burden" doesn't necessarily mean doing something illegal. In the case of Polymarket, they probably are, but plenty of other companies find ways to reduce their regulatory compliance needs in perfectly legal ways.

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raddan 2 hours ago | parent | prev | next [-]

There’s dodging and then there’s _dodging_. If you are operating in a legal gray area, that’s an unsavory business practice that is, as you say, widespread. Then there’s operating illegally in full view of everybody. I do not personally ascribe to the idea that a thing is OK just because one is not currently being prosecuted. Polymarket (and Kalshi) is bad for the country, their claims to the contrary are highly dubious, and it’s a case where not only are they actually in the wrong, they are quite specifically legally wrong.

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Spooky23 2 hours ago | parent | next [-]

Well, the good news for them is that the president’s children are involved in the company. It’ll be very easy to grease the appropriate hands.

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pear01 an hour ago | parent | prev [-]

You may feel that way, and I may sympathize. But I really think you are over-indexing on your own personal belief that they are "bad for the country". If we follow your logic then a company is doing more _dodging_ simply on the basis of one's own moral aversion. So maybe if I'm an environmentalist I think coal companies are especially dodgy. If I'm a pacifist maybe a defense contractor. If I'm an evangelical maybe a company that contracts with the government re some reproductive care.

"operating illegally in full view" vs "legal gray area" is not a determination that can be made based on your subjective view of what "makes a thing OK". The fact that you pair the accusation that they are "operating illegally in full view" with the notion that you can condemn a thing that is not "currently being prosecuted" only further undermines your argument. Your moral objection is your judgement to make, the question of what is illegal cannot be. The latter is exclusively the domain of the courts, not any individual (or collective) moral outrage. Your seeming desire to conflate the two to satisfy your personal feelings unfortunately undermines whatever cogent points you may have re their legality on the merits.

The fact is they are currently working with the government on a return to the US markets. engaging in a government process such as they are seems to not resemble anything akin to "operating illegally in full view of everybody". You would be more convincing if you would levy your criticism in more reasonable terms. I personally suspect there is a lot more "gray area" here than you seem to contemplate.

	▲	raddan 20 minutes ago \| parent [-]
		> The fact is they are currently working with the government on a return to the US markets. engaging in a government process such as they are seems to not resemble anything akin to "operating illegally in full view of everybody". This is a seriously tiresome argument. How about this? Feel free to cite how their recent moves will enable them to 1. satisfy regulators that they are not violating the Commodity Exchange Act; 2. satisfy other parts of the government that they are not simply illegal gambling; 3. satisfy the states that are actively suing them RIGHT NOW. It does not matter that there are friendly people in the administration. The fact is that they were told to wind down their markets and leave. They did not do this. Even if their behavior may become legal in the future, it is currently illegal. My personal objection is IN ADDITION to the legal problems. My personal opinion is that this business and the people who run it SUCK. There’s no conflating: both things are true. Why do you insist on sticking up for douchebags?

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fsckboy 2 hours ago | parent | prev [-]

>the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious

huh? you aren't making a coherent argument. registering in any US state you are still subject to the same federal regulations, Delaware is not different, it offers no shelter from federal regulations.

in fact, if it is not your primary state of operation, then it subjects you to federal regulations for interstate commerce where you might not otherwise be.