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DE Secretary of State Employee Recognition Luncheon

Update*

Reminder…

On Friday, June 9, 2017 an Employee Recognition Luncheon is planned for all the employees of the Delaware Secretary of State – Division of Corporations.  State services have been altered.

* There will be NO “Same Day” or “Must Approval” service filings for this day.

All 30 Minute and One-Hour service filings must be received prior to 10:00 AM (ET)Two-Hour service filings will need to be received prior to 9:00 AM (ET) and 24 Hour service filings must be received prior to 12:00 PM (ET).

We will be able to secure filing dates and times until 10:30 PM (ET).

To meet these deadlines, Incerv must receive all filings AT LEAST 15 MINUTES before the DE SOS corresponding cut-off times.

Incserv will have full-staff available to meet all of your corporate and UCC needs. Contact us via email or call 800.346.4646
(International callers please dial 302.531.0855.)

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March 24th – DE Secretary of State Cut-Off Times Altered!

On Friday, March 24, 2017 an Employee Recognition Luncheon is planned for all the employees of the Delaware Secretary of State – Division of Corporations.  State services have been altered.

All 30 Minute and One-Hour service filings must be received prior to 6:00 PM (ET) and Two-Hour service filings will need to be received prior to 5:00 PM (ET).  All other cut-off times will remain unchanged.

We will be able to secure filing dates and times until 10:30 PM (ET).

To meet these deadlines, Incserv must receive all filings AT LEAST 15 MINUTES

before the DE Secretary of State corresponding cut-off times.

Incserv will have full-staff available to meet all of your corporate and UCC needs. Contact us via email or call 800.346.4646 (International callers please dial 302.531.0855).

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Succeeding at Biz: 4 Easy Rules That Will Keep Your Delaware Corporation Alive.

Incorporating Services, Ltd. (Incserv) is very fortunate to repost a wonderful article originally published online at Daily-Journal.com, The Kankakee Valley, Illinois. The author is Mr. Cliff Ennico of The Law Offices of Clifford R. Ennico located at 2490 Black Rock Turnpike, # 354 Fairfield, Connecticut 06825.

The article can be read below in its entirety.

Some friends and I started a high-tech business a couple of years ago and formed a Delaware corporation to run the business. We live and work in another state but were told that Delaware was the place to be for tech startups (it might have been one of your columns, actually).

We formed the corporation online to save money, and it seemed like everything was OK.

A couple of weeks ago, we signed a letter of intent with an angel investor who wants to put $3 million into our company. Needless to say, we were very excited.

But when the investor’s lawyer looked into our company, he made some horrifying discoveries. It seems Delaware killed off our corporation two years ago because we didn’t pay a “franchise tax,” whatever that is. Because our corporation was no longer active, somebody else grabbed our name in Delaware and is now trying to register it as a trademark. If that person succeeds in doing that, we will have to hand over our website domain name even though we’ve spent a fortune building a website around it.

The lawyer also told us that because we never registered in the state where we are actually doing business, we owe tons of money in penalties even though we’ve paid taxes here every year. Now the investor is not so excited about doing business with us. While we are embarrassed as hell, shouldn’t someone have told us we had to do this stuff?

While it could be true that I once wrote a column about the benefits of tech startups incorporating in Delaware, let’s be clear: I never, ever advised someone to form a corporation or limited liability company (LLC) online, and this is one of the reasons. While the online services can get you up and running quickly and cheaply, they don’t help you with the things you need to do on an ongoing basis to keep your corporation or LLC alive. This email is a perfect example of what can happen when you don’t stay on top of things compliance wise.

Having wagged my finger at this reader, I have to say I’m sympathetic to her plight. When you are building a fast-growing tech company, you are working 24/7 365 days per year, living on Red Bull, ramen noodles and three hours of sleep per week. Nobody is thinking about legal compliance. Yet failing to keep on top of things can kill your startup, as this reader’s email attests.

Here are four easy rules that will help keep your corporation or LLC on life support.

Rule No. 1: Hire a lawyer and an accountant, and listen to them! It is impossible to run a tech startup in the United States without a good lawyer and a good accountant. You need both, especially if you are too busy to deal with government paperwork. Whenever your lawyer or accountant tells you something needs to be done, do it immediately! They are not just trying to run up a bill. They are trying to save your butt.

Rule No. 2: Watch your mailbox and inbox. I am certain that the state of Delaware or the corporation’s registered agent sent this reader both emails and snail-mail reminders telling her when annual reports, franchise tax reports and other compliance paperwork were due. She probably threw them away thinking they were junk mail or spam.

This point is so important that I need to scream: WHEN YOU HAVE A CORPORATION OR LLC AND YOU GET MAIL FROM A STATE OR GOVERNMENT AGENCY ADDRESSED TO THE COMPANY, IT IS NEVER, EVER TO BE TREATED AS JUNK MAIL! If you are too busy to deal with it, you should forward the email, or scan and email the paper correspondence to your lawyer and accountant IMMEDIATELY. Let them tell you whether it’s important or not. If they say it’s important, follow Rule No. 1.

Rule No. 3: Pay your registered agent. If you are incorporated in Delaware or a state other than where you are actually located, your online service hired a registered agent in that state to act as your local presence. That company will send you a bill each year for its services. Pay it promptly. If it doesn’t get paid, it will withdraw as your registered agent, and the state will dissolve your corporation or LLC.

Rule No. 4: Register in your home state. Forming a Delaware corporation does not allow you to operate legally in your home state. For that, you need to register as a foreign corporation with your state’s secretary of state and pay taxes to the state tax authority. You have to do both. Failing to register with the secretary of state can lead to heavy penalties and bar you from your state courts if you ever have to sue someone.

Yes, doing these things costs money. But it’s money well-spent. Find the money, and get them done.

Cliff Ennico (crennico@gmail.com) is a syndicated columnist, author and former host of the PBS television series “Money Hunt.” This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.

Special thanks to Mr. Ennico for his insight on properly forming and maintaining your corporate entity. Incserv is here to help, contact us for more information.

 

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Phone Service Disruption 10.04.16

Having trouble reaching us by phone today? Our phone service provider is experiencing a large phonenetwork outage that in turn is affecting phone service in our Delaware, Washington, DC and Florida offices. Unfortunately this situation is beyond our control and we apologize for any inconvenience. At this time, service is intermittent. If you have trouble reaching us via phone, please feel free to reach out to us via Chat or Email. We’re here!

Please check back for additional updates.

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Delaware Fun Facts

Incorporating Services, Ltd (Incserv) has been a Delaware company for over 40 years. We are very proud to be based in Delaware and when the Delaware Business Times posted an article “60 facts about Delaware and its businesses”, we thought we’d share this amusing and quirky list of Delaware fun facts.

http://www.delawarebusinesstimes.com/60-facts-about-delaware-and-its-businesses/

Happy reading and Happy Friday,

The Marketing Team at Incserv

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Delaware Statutory Trust

Joshua M. Twilley, President of Incorporating Services, Ltd. shares with us his insight on the Delaware Statutory Trusts.

Delaware is long known to be a leader in corporate law, but Delaware is also a trailblazer in trust law.  In 1988, Delaware was the first state to adopt a legal framework governing trust law, with the passage of the Delaware Business Trust Act, which governs the Delaware Statutory Trust (DST).  While other states have adopted similar legislation, the Delaware version has evolved over the years.  Today, the DST is considered the preferred vehicle for trust activities that involve financial transactions.

What is a Delaware Statutory Trust?

In an ordinary trust relationship, a fiduciary would hold legal title on a property on behalf of another, who held the equity title.  These trusts are governed by a Common Law framework.  The Delaware Business Trust Law allows for the creation of a Delaware Statutory Trust (DST).  The DST is considered a separate entity which can in many ways behave like a corporate entity, with a body of trustees and a group of beneficial owners.

What makes a Delaware Statutory Trust a preferred vehicle?

This structure offers a number of advantages.  The trust can have multiple trustees and beneficial owners, who receive the same liability protection afforded to stockholders of a Delaware corporation.  As an independent entity, the DST can enter into contracts while still protecting beneficial owners, and even provides beneficial owners protection in the event of bankruptcy.  Finally, the Delaware Court of Chancery, widely considered one of the best corporate and trust courts in the world, has jurisdiction over the DST.

How is a Delaware Statutory Trust formed and maintained?

Forming a DST is an easy process, requiring a certificate of trust to be filed with the Delaware Secretary of State, along with the Trust Agreement.  There are no annual maintenance requirements (franchise tax or annual report) for a DST.  A Delaware resident must be named as a trustee.

Incserv can assist in all aspects of filing the Delaware Statutory Trust and can provide a Delaware resident as a trustee.  Contact us for more information.

The information within this post is intended for general information purposes only. Incserv and its employees cannot offer legal or financial advice. Please consult with your legal counsel for assistance in how this information may or may not affect you and your business prior to making any decisions. The above information (and any attachments) should be judged accordingly.

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The Panama Papers Part II

Joshua M. Twilley, President of Incorporating Services, Ltd. shares with us the following with regards to the Panama Papers.

The Panama Papers (Papers) put a spotlight on the uses of corporate entities for tax purposes.  While many (if not most) of the entities in the Papers were established legally and are not necessarily involved in legal wrongdoing, the focus on the uses of corporate entities and how they can be monitored while protecting the privacy of entities is an important discussion.  I previously wrote about the Panama Papers here.

Rick Geisenberger, Chief Deputy Secretary of State of Delaware and head of the Department of Corporations, recently outlined some of the issues facing identification and prosecution of those using corporate entities operating in illegal ways.  Mr. Geisenberger’s article appears in the September/October 2016 issue of Delaware Business, a publication of the Delaware State Chamber of Commerce.

This insightful article, which can be found here, also highlights several easy-to-implement solutions to make sure corporate entities are not used for illegal purposes.

Delaware has been a leader on developing best practices for protecting America’s interests, which many other states have adopted.  I agree with Rick that the solution can’t be solved by looking to each state to adopt some form of compliance, with 50 different sets of laws and 50 different levels of corporate involvement.  The currently proposed federal solution outlined in the article would ensure compliance in all jurisdictions, creating a good balance of protection and privacy, and give federal authorities the ability to investigate and prosecute.

The information within this post is intended for general information purposes only. Incserv and its employees cannot offer legal or financial advice. Please consult with your legal counsel for assistance in how this information may or may not affect you and your business prior to making any decisions. The above information (and any attachments) should be judged accordingly.

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DE Secretary Of State Cut-Off Times Altered!

On Thursday, September 8, 2016 an Employee Recognition Luncheon is planned for all the employees of the Delaware Secretary of State – Division of Corporations. State services have been altered.

All 30 Minute and One-Hour service filings must be received prior to 6:00 PM (ET)and Two-Hour service filings will need to be received prior to 5:00 PM (ET). All other cut-off times will remain unchanged.

We will be able to secure filing dates and times until 12:00 AM (ET).

To meet these deadlines, Incserv must receive all filings AT LEAST 15 MINUTES before the DE SOS corresponding cut-off times.

Incserv will have full-staff available to meet all of your corporate and UCC needs. Contact us via email or call 800.346.4646 (International callers please dial 302.531.0855).

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Can Delaware Be Dethroned?

Josh Twilley, President of Incorporating Services, Ltd. shares an article from the Delaware Business Times, featuring a Professor Charles Elson, a well-recognized expert on corporate governance at the University of Delaware. Mr. Elson will be presenting at UCLA on the topic of “Can Delaware Be Dethroned?” discussing whether Delaware’s preeminence as the legal home to most of the Fortune 500 companies can be displaced.

The Delaware Business Times recently caught up with Prof. Elson for a Q&A. You can read the article in its entirety here. Below are some of the highlights from this article posted on August 15, 2016:

  • Delaware has a reputation for fairness and neutrality in determining corporate matters because other stakeholders (either corporate or individual) do not have unfair influence over the legislation. The Delaware Court of Chancery continues to be a global leader in corporate adjudication in part because of this fair balance.
  • Charles believes the movement towards federalizing corporate law is essentially already in place, in that many other states follow Delaware’s lead in new corporate regulatory law. Federalizing would create inconsistencies in the law which would result in the Supreme Court taking up many corporate cases, which they have little interest in doing.
  • Corporate law alone is not strong enough to prevent bad actors from using the corporate structure for illegal means. Delaware is no more complicit in allowing bad actors to use the corporate legal structure than any other state. (I would add that Delaware is less complicit because many other states have a less thoroughly developed corporate legal structure — in a less regulated environment, bad actors can get away with more…)

If you’d like to learn more about forming an entity in Delaware, contact us and a Corporate Specialist will assist you.

The information within this post is intended for general information purposes only. Incserv and its employees cannot offer legal or financial advice. Please consult with your legal counsel for assistance in how this information may or may not affect you and your business prior to making any decisions. The above information (and any attachments) should be judged accordingly.

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Can Delaware Be Dethroned?

Can Delaware Be Dethroned?

delaware

Josh Twilley, President of Incorporating Services, Ltd. shares an article from the Delaware Business Times, featuring a Professor Charles Elson, a well-recognized expert on corporate governance at the University of Delaware. Mr. Elson will be presenting at UCLA on the topic of “Can Delaware Be Dethroned?” discussing whether Delaware’s preeminence as the legal home to most of the Fortune 500 companies can be displaced.

The Delaware Business Times recently caught up with Prof. Elson for a Q&A. You can read the article in its entirety here. Below are some of the highlights from this article posted on August 15, 2016:

* Delaware has a reputation for fairness and neutrality in determining corporate matters because other stakeholders (either corporate or individual) do not have unfair influence over the legislation. The Delaware Court of Chancery continues to be a global leader in corporate adjudication in part because of this fair balance.

* Charles believes the movement towards federalizing corporate law is essentially already in place, in that many other states follow Delaware’s lead in new corporate regulatory law. Federalizing would create inconsistencies in the law which would result in the Supreme Court taking up many corporate cases, which they have little interest in doing.

* Corporate law alone is not strong enough to prevent bad actors from using the corporate structure for illegal means. Delaware is no more complicit in allowing bad actors to use the corporate legal structure than any other state. (I would add that Delaware is less complicit because many other states have a less thoroughly developed corporate legal structure — in a less regulated environment, bad actors can get away with more…)

If you’d like to learn more about forming an entity in Delaware, contact us and a Corporate Specialist will assist you.

The information within this post is intended for general information purposes only. Incserv and its employees cannot offer legal or financial advice. Please consult with your legal counsel for assistance in how this information may or may not affect you and your business prior to making any decisions. The above information (and any attachments) should be judged accordingly.