Delaware: The Complete Package for Business
Filed Under: Delaware, Trend Report
Tags: Delaware, Delaware Division of Corporations, Trend Report
What state incorporates more than 63% of fortune 500 companies and 76% of all new Initial Public Offerings in 2010? One might think it must be a large state with many major cities, but that state is Delaware, which continues to attract more companies each year, further reinforcing its predominance. There isn’t one single reason why Delaware has long been the favored state for incorporating. This enviable position is because of the total package of incorporation services, developed and refined over the years.
Delaware’s centuries old Court of Chancery has written most modern U.S. case law, while interpreting Delaware’s General Corporation Law, which is known as the most usable and advanced business formation statute in the nation. The Division of Corporations in this business-friendly state provides state-of-the art service to customers.
The Division’s 2010 Annual Report, summarized below reviews progress, developments, and marketing efforts which keep Delaware the premier state for incorporations.
New entity formations grew 15.5 %
70% off all new filings in 2010 were LLCs
24% of new filings were corporations
2.5% increase in active business entities since 2009
17 consecutive months of growth since the national economic recovery began in 2009, with 20% growth in the first three months of 2011
76% of all new Initial Public Offerings (IPO’s) are Delaware entities. (Such as LinkedIn & Pandora Media)
Incorporation revenue made up 26% of the State’s general fund for 2010
Marketing efforts included many trips worldwide looking for opportunities to expand Delaware’s global market share
The total package, with Delaware’s General Corporation Law, Court of Chancery, and Division of Corporations working together to reinforce each other, make Delaware the premier home for corporations today.
To view the complete report, go to http://www.corp.delaware.gov/10CorpAR.pdf
Trend Report: Young Entrepreneurs on the Rise
Filed Under: Trend Report
Tags: Entrepreneur, Small Business, Trend Report
Check out these statistics reported on Fox News about young entrepeneurs being on the increase.
1. Labor department statistic says unemployment rates have doubled among college graduates.
2. Job offers to college graduates have dropped 20% from 2008 to 2009.
3. More college grads are going into business for themselves and are willing to take the risks of business ownership.
4. College kids are changing the way they get jobs by creating their own businesses.
5. Entrepeneurship among college graduates of all ages is at a 15 year high, they are going into business for themselves.
6. Current unemployment with college graduates is at 4.3%, current National unemployment rate is 8.9%.
7. 26% of new businesses are created by people 20-34 years of age.
8. Small business is the backbone of America and the younger generations are the future.
Franchise Opportunities
Filed Under: Articles of Interest, Trend Report
Tags: Articles of Interest, Frachise
When thinking of a franchise business, many people think of McDonalds, Burger King, and Wendy’s. But there are many more types of franchise businesses. One out of three dollars spent by Americans for goods and services is spent in a franchise business. Homes are bought, sold, cleaned, painted and carpeted through franchised businesses. Cars can be purchased, tuned, and washed through franchises. Franchising is successful because we Americans are people of habit and are brand-driven with our purchases. We trust brands we see often, and tend to be loyal to products or services delivered to us in the same way all of the time. Entrepreneurs have many opportunities to become part of one of these businesses, but have to weigh the advantages and disadvantages of investing their money and time. Franchising is a way to go into business for yourself but not by yourself.
Although there were 10% fewer franchises last year, industry watchers expect a year of slow but steady recovery for the franchise world. An upswing has already begun for recession-proof businesses such as fast food, tax preparation and home repair. Financing for franchises has changed, however. Instead of the ten or twelve big national lenders that would finance new franchises anywhere, entrepreneurs now must go through a regional or community bank. Also many franchisors are making loans themselves, discounting fees, or allowing new franchises to pay fees over time. Contrary to public opinion, there is money to be loaned for new franchise start ups.
The top 10 franchises for 2010 are:
1. Subway (fast food)
2. McDonalds (fast food)
3. 7-Eleven Inc. (convenience store)
4. Hampton Inn (mid-priced hotels)
5. Supercuts (hair salon)
6. H&R Block (tax preparation)
7. Dunkin’ Donuts
8. Jani-King (commercial cleaning)
9. Servpro (insurance/disaster restoration and cleaning)
10. ampm Mini Market (convenience store and gas station)
Franchising advantages over going into business for yourself include: reduced investment risk by marketing an established product, proven methods and business procedures, start-up assistance, experiencing success sooner, on-going support, advertising, collective purchasing power, and possibly easier financing.
Some disadvantages include: initial franchise fee may be non-refundable, royalty fees may have to be paid even if there isn’t significant income and may be due if you terminate the business early, the right to renew isn’t guaranteed, lack of independence because company controls restrict ability to exercise your own business judgment, franchise agreements tend to favor the franchisor, and the fact that a franchisor’s problem may become your problem. Fundamental to the smooth running of a franchise business relationship is a business model that is profitable to both the franchisor and franchisee. A great deal of research and self-evaluation is needed before deciding whether a franchisor’s business opportunity would be right for you.
If you are entering into a new franchise opportunity, don’t forget to incorporate first!!!!
For more information on franchises click HERE.
Delaware’s Secretary of State Annual Conference
Filed Under: Delaware, Registered Agent, Trend Report
Tags: Delaware, Delaware Division of Corporations, Registered Agent, Trend Report
In Delaware every fall, The Secretary of State holds a three-day conference for Delaware Registered Agents and the key people at the Division of Corporations. This year, we just finished the 24th annual conference and, having been in business 30 years, I’ve been to almost every one of them. But this year was particularly interesting.
The highlight of the event is the “Annual Report” given by Richard J. “Rick” Geisenberger, the chief Deputy Secretary of State and Director of Corporations. This year he reported:
Delaware is now the home to 890,000 domestic entities. They include 260,000 corporations and 630,000 LLCs, LPs and Statutory Trusts. An additional 11,000 entities from outside Delaware are registered here as “foreign Entities”. Delaware, which has always had more chickens than people, now has about one company for every person who lives in the State. Most states have about 1 company per 20 people.
Delaware is home to 63% of all fortune 500 companies this year and was the choice of 734 of the 907 new IPO’s (Initial Public Offerings) in the past 7 years. IPO activity reflects the dismal economic business climate in the USA today. It wasn’t long ago that more than 400 IPO’s were launched in a single year, then the total fell abruptly to 28 new IPOs in 2008, then 37 in 2009 and 53 so far this year. The upward trend the past three years could be called a recovery, but still a poor showing when compared to the boom years of the past.
A new trend is emerging however, giving hope for more business. Foreign companies, especially from China, are incorporating in Delaware and going public in the USA. Watch for this trend to continue as China becomes the dominant player in manufacturing for the global markets.
Delaware’s Court of Chancery still makes the news regularly for its many high-profile cases. This year we saw a battle between EBAY and CRAIGSLIST fought in Delaware just up the road from my office. Meg Whitman, and the EBAY group, won this one.
Delaware has been working with the U.S. Treasury Department and the U.S. Department of Justice to reduce the incidents of the fraudulent use of Delaware companies in the International arena. Since Delaware prohibited Bearer Shares in 2003, it has been proactively issuing regulations that are designed to help prevent the fraudulent use of companies.
The U.S. Department of the Treasury has proposed several drafts of a plan to make the ownership of companies easier to trace. Currently, Registered Agents are not obliged to keep Beneficial Ownership information on the companies we form for our customers. In Delaware we are required to keep an up-to-date record of the “Communication Contact”. However, in the future the Department of the Treasury is recommending that Registered Agents will be responsible for keeping Beneficial Ownership information accurate and current.
As a final bit of good news, Mr. Geisenberger reported that the Division of Corporations brought in $878 Million dollars in the last fiscal year which accounted for 27% of the State of Delaware’s budget, emphasizing the importance of this effort for the whole state.
ThINC Green
Everyone remembers the absurd gasoline prices of approximately $4-$5 per gallon or more the US experienced a couple of years ago. Gas prices may have decreased since then, but they still remain at higher than average levels. Now is the time many entrepreneurs are exploring options to capitalize on alternative gasoline dependent markets, as well as other forms of clean technology.
Environmentally friendly industries are currently growing at a time when many others are dwindling. According to MSNBC, the fastest growing sectors are recycling, energy efficiency, solar, wind and water conservation. This “green” market is a hot bed for innovative thinkers and entrepreneurs who have what it takes to start a ground-breaking environmentally responsible business on their own.
A 2008 Dechert LLP Annual Report on Trends in Trademarks indicated 2007 was the busiest year ever for trademarks. There were 300,000 applications for the first time in history, which surpassed the old record of 289,000 during the Internet surge of 2000. The word “green” was the most popular branding of all trademark applications. In 2007, the number of applications containing the word “green” increased from 1100 to over 2400. This was the third year in a row in which the word “green” has significantly increased in the number of applications. Applications for incorporating the word “earth” increased approximately 60% from 550 to over 900 in 2007.
Due to the recent economic downturn, it is only inevitable that the overall number of patent and trademark applications have decreased. However, the Dechert LLP Annual Report for 2009 indicated that “applications for marks containing the word GREEN increased 32% in 2008 (to more than 3,200 filings), ECO-prefix marks were up 86% (with 1,700+ applications), and applications for more than 500 ENVIRO-marks were filed, representing a 22% jump. The word CLEAN was also a popular buzzword, appearing in over 1,000 marks to suggest environmental friendliness, up 30% from the year before.”
While there are some industries that will suffer from the hardship of extreme gasoline prices, there are other markets that will flourish. Being environmentally conscious is a worldwide trend that will continue to escalate and intensify during the coming years. When considering starting a new business venture, think how the new company can prosper and thrive in an ever growing “green” world.
