Delaware General Corporation Law

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Delaware Company Law (Title 8, Chapter 1 of the Delaware Code) is a law governing corporate law in the US state of Delaware. This is the most important jurisdiction in US corporate law since the beginning of the 20th century. More than 50% of public companies in the United States and 60% of Fortune 500 are incorporated in the country.

Video Delaware General Corporation Law

History

Delaware gained its status as a corporate refuge in the early 20th century. Following the example of New Jersey, which enacted corporate-friendly laws at the end of the 19th century to attract businesses from New York, Delaware was adopted on March 10, 1899, a general merger action aimed at attracting more businesses. The group that pushed this law is meant to establish a company that will sell services to other businesses incorporated in Delaware. Prior to the emergence of a common merger action, establishing a corporation requires special action from the state legislature. A general merger allows anyone to form a company simply by raising money and submitting articles of incorporation with the Secretary of State.

Maps Delaware General Corporation Law

Other legal aspects

Due to the widespread experience of Delaware courts, Delaware has a more developed case law than any other country, which serves to give corporations and advice them greater guidance on corporate governance issues and transactional obligations. The dispute over the internal affairs of the Delaware company is usually filed in the Delaware Court of Chancery, which is a separate equity court, as opposed to a court of law. Therefore the court of justice, there is no jury; his case was heard by a judge, called the chancellor. Since 1989, the court consists of one Chancellor and four Vice Rectors. The court is a trial court, with a chancellor listening to each case. Lawyers can appeal the final decision of the Court of Justice to the Delaware Supreme Court.

Delaware has also attracted large credit card banks because of its relaxed rules related to interest. Many US states have usury laws that limit the amount of interest the borrower may incur. The federal law allows a national bank to "import" this law from the country where its headquarters is located. Delaware (among others) has a relatively casual interest law, so some national banks have decided to place their main office in Delaware. However, the national bank is a corporation formed under federal law, not the law of Delaware. A company formed under the aegis of Delaware state laws of relaxed interest rules as long as it conducts business in Delaware, but is subject to legal restrictions of other countries if conducting business in other countries.

In accordance with the "doctrine of internal affairs", corporations acting in more than one country are subject only to their country's laws relating to the organization's internal affairs arrangements. As a result, Delaware companies are subject almost exclusively to the laws of Delaware, even when they do business in other states.

While most countries require a non-profit company to have at least one director and two officers, the law of Delaware does not have this restriction. All offices may be held by one person who may also be a sole shareholder. The person, who does not need to be a citizen or resident of the US, may also operate anonymously only with a Search Agent who registers the company under the name Delaware.

TransPerfect Cases

According to Article 226 of the Delaware General Corporation Law (DGCL), the Court of Justice is permitted to appoint a recipient or custodian for a company when its shareholder or director is divided and the impasse is detrimental to the corporation. In August 2015, the head of Delaware Chancery, Chancellor Andre Bouchard employs 226 (a) of DGCL to order the dissolution of companies that are not in financial trouble, or at risk of bankruptcy, because co-owners can not get along. The forced sale of TransPerfect is the first time a company that does not meet the criteria for curators and sales mandated under the Delaware law is forced to disband, awarding one board member who wants to come out with a premium of control. Former New York Mayor Rudolph Giuliani has an interest in the case because he views it as "contradictory" to Delaware corporate law.

Under the law, Chancery is not obligated or even mandated to make accommodation for any party to sell interest. The only concern for the Delaware court is to ensure that the company is well run and not harmed. In this case, the TransPerfect case appears to be contrary to the court's mandate. The Chancellor decided to mandate the sale of the company because the two directors were locked in a dispute that made them unable to negotiate among themselves. The problem is that in doing so, Chancery and Chancellor seem to be looking for an unfair part for one of the partners who wants to get out and ask for an offer to leave, forcing a partner who prefers to keep the company operating to get out as well. The Court quotes an employee's written statement proving one party's commitment to the other's commitment.

On April 27, 2016, rather than sealing his decision, Chancellor Bouchard told the parties to take more time and to come to a resolution outside the courtroom. Shawe then made a public offering of $ 300 million to his co-founders.

Benefits and tax expense

Delaware does not charge income tax on companies that do not operate within the country, so taking advantage of other benefits Delaware does not generate taxation. At the same time, Delaware has a very aggressive tax on banks located in the state. In general, however, the state is seen as a positive location for corporate tax purposes because favorable legislation allows companies to minimize corporate spending (achieved through standard legal corporate legal processes), creating a core in Delaware with operating companies often in other countries. stated.

In addition, Delaware has used its position as a merged country to generate revenue from its prohibited and unclaimed property law. Under the precedent of the US Supreme Court, the state of establishment must guard the abandoned and unclaimed properties, such as unfreeded checks and gift certificates not exchanged, if the company has no information about the location of the property owner.

A country may levy taxes, however, a franchise tax on companies incorporated therein. The franchise tax in Delaware is actually much higher than in most other countries that typically charge little or no corporate income tax on the part of the corporation's business in that state. Delaware franchise taxes supply about one fifth of the country's revenues.

In February 2013, Economist published an article on tax-friendly jurisdiction, commenting that Delaware defended "Stolen Dollars and Stolen and Washed Money with Reasonable Expenses". Jeffrey W. Bullock, Secretary of State of Delaware, asserted that the state has achieved the right balance between withholding criminality and "respecting legitimate business actors who benefit" from problem-free merging.

2013 amendment

On June 30, 2013, Delaware Governor Jack Markell signed a legal amendment to the Delaware Company General Law affecting some provisions in current law and can greatly affect the process by which public companies are combined. The law shall enter into force on 1 August 2013, except for the ratification of amendments to the amendment of the damaged enterprise which entered into force in 2014.

Note

External links

Delaware Department of Foreign Affairs, Corporate Division Official website, search for company names.
Delaware Public Company Law
Delaware Division of Corporations
The Delaware Journal of Corporate Law
Delaware Corporate Code from FindLaw

Source of the article : Wikipedia

Delaware General Corporation Law

Kamis, 14 Juni 2018