Comparison of LLC Statutes: Delaware, New York, and Texas
Should I Form My LLC in Delaware or Elsewhere?
Business owners often ask us where they should form an LLC. Delaware has long been the preferred state of incorporation for businesses. Indeed, of the corporations that make up the Fortune 500, more than one-half are incorporated in Delaware.[1] There are many advantages of forming a company in Delaware, including the state’s flexible business law and highly respected business court, among others, which provide more guidance and certainty in conducting business than anywhere else in the country.
For reasons similar to corporations, Delaware also makes sense for some limited liability companies.
This multi-post series will look at the Delaware Limited Liability Company Act and discuss how it differs from other states’ limited liability company laws, notably New York and Texas, in some key areas including creditors’ rights, fiduciary duties, series availability, and others. In our next post, we will discuss creditors’ rights in these states.
This posting is intended to be a planning tool to familiarize readers with some of the high-level issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.
Steps have been taken to verify the contents of this article prior to publication. However, readers should not, and may not, rely on this article. Please consult with counsel to verify all contents and do not rely solely on this article in planning your legal transactions.
About the Author
Shawn McBride – R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Office, P.L.L.C. which helps clients in legal issues related to starting companies, joint ventures, raising capital from and negotiating with investors and outside General Counsel functions. Shawn can be contacted at: 407-517-0064; [email protected], or www.mcbrideattorneys.com.
[1] Lewis S. Black, Why Corporations Choose Delaware (2007) (printed and distributed by Del. Dep’t of State, Div. of Corps.), at 1.