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| Which State? |
 Corporations and limited liability companies
are formed under the laws of specific states. The laws differ from state
to state. Companies setting up operations in New York typically consider
forming the entity under the laws of either Delaware or New York . With
companies seeking venture financing, a Delaware corporation is the usual
choice. Delaware makes a point of having entity laws that are pro-management.
There are a number of minor differences between the laws of Delaware and
New York that make Delaware advantageous in certain situations. Bear in
mind, though, that if a Delaware corporation or limited liability company
plans to establish an office in New York, it will be required to do a
second filing in New York to “qualify” to do business in the
state as a “foreign” corporation.
For many companies that establish operations in states other than Delaware,
the advantages of a Delaware entity do not justify registrations in two
states. A closely-held company based in New York with one or just a few
owners who also manage the company is usually well-advised to organize
itself as a New York corporation or limited liability company. |
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