Business
State incorporation, Delaware's dominance and the federal securities overlay
Corporate law in the United States is state law, and a corporation is governed by the internal affairs of its state of incorporation regardless of where it operates. Delaware holds the majority of large public companies because of the Delaware General Corporation Law and the specialist Court of Chancery, which sits without a jury. Federal law enters through the securities statutes once shares are publicly offered.
Key rules
- Jurisdiction — State law of the incorporating state governs internal affairs; federal securities law governs public offerings
- Deadline — Delaware annual franchise tax and report: due 1 March
- Deadline — Form 10-K: 60 to 90 days after fiscal year end, depending on filer status
- Deadline — Corporate Transparency Act beneficial ownership: within 30 days of a change
Governing law
- Delaware General Corporation Law, 8 Del. C. §§ 101 et seq.
- Securities Act of 1933, 15 U.S.C. §§ 77a et seq.
- Securities Exchange Act of 1934, 15 U.S.C. §§ 78a et seq.
- Bankruptcy Code, 11 U.S.C.chapters 7 and 11
In practice
The limited liability company, not the corporation, is now the default vehicle for closely held American business, because it offers pass-through taxation with limited liability and near-total freedom of contract in its operating agreement. Chapter 11 is a debtor-in-possession restructuring in which existing management stays in control, which is why distressed foreign groups with a US nexus often file there.