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

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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_--__--__ 2 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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eichin an hour ago | parent [-]

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 an hour 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.

	▲	detourdog 4 minutes ago \| parent [-]
		That is really a wild thing. I culture of legal belief based on precedent. It's as if one is joining a club that has rules of business conduct clearly documented.

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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 40 minutes 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.