United States Chamber Institute for Legal Reform Ranks Delaware #1
Filed Under: Articles of Interest, Delaware
Tags: Delaware, Law
For the past nine years the U.S. Chamber of Commerce has ranked the 50 states’ liability systems and corporate law structure as a whole. Delaware is unique in that it ranks #1 for the ninth year in a row in a survey generated by the United States Chamber Institute for Legal Reform. The survey polled judges, attorneys, professors, and others for opinions on which state offers the best structure. Many states that are supposedly “corporate friendly,” such as Nevada, are buried deep in the list and continue to decline year after year, while Delaware flourishes. After reading this report, it is not surprising that a good portion of our business comes from the State of California, considering their law structure is one of the absolute worst! Residents of Delaware are grateful for the strong corporate law structure their state has created because it benefits each and every resident. Over one- third of Delaware’s income can be attributed to the Division of Corporations. In 2009, the corporate franchise tax alone generated $1,648 for the average Delaware household.
This strong corporate law structure protects individuals behind the company, which is why money is generated from people around the world looking at Delaware to incorporate. This revenue even enables Delaware to be one of the few states without a sales tax! The State of Delaware will continue to keep laws on the cutting edge through consistent judgments, and by keeping a reasonable and fair legal environment for the corporate entities. To review the report, go to http://www.instituteforlegalreform.com/lawsuit-climate.html#/2010
Three and Four-Letter Words
Filed Under: INC Knowledge
Tags: Business Tips, Entrepreneurs, Law
There are literally hundreds of different bureaucratic agencies within the Federal Government and most of them have three or four-letter abbreviations. Every entrepreneur knows the IRS and the USPS and most will be able to recite the full names for the FBI, NASA, INS, FDIC, DEA, NLRB and SEC. The question is: How many of you know what the OFAC agency regulates and what the SDN list they publish has to do with YOUR company?
OFAC, today’s featured four-letter word, otherwise known as the “Office of Foreign Assets Control”, is an agency that has been in existence since 1950, but has only hit the front pages since the attack on the twin towers of September 11, 2001. Many entrepreneurs, small and medium sized business executives are not familiar with the organization or the list they publish known as the SDN list, today’s featured three-letter word, which stands for Specially Designated Nationals.
According to the Official OFAC website: “The Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.”
Civil penalties for working with restricted countries or individuals include fines that can be as low as $395.25 levied on an individual who allegedly purchased Cuban-origin cigars offered for sale on the internet (Cuba is a restricted country so purchasing anything from Cuba or selling anything to Cuba is an offense). They can be pretty hefty fines also, as Gate Gourmet, Inc. found out when it was hit with a $581,900 settlement for supplying catering services to Air Cubana Airlines over a three year period. In some cases, criminal violations could land top executives of offending companies in jail.
A list of all violators is published every month along with the penalty imposed; click below to view the various penalties levied upon individuals and companies, some of whom self reported, and others who were not aware that they or their company was breaking the law. Many of the top companies in the world made the list and paid the price, and also a lot of unsuspecting, and maybe naïve, entrepreneurs who stepped across the line due to ignorance of the law. Don’t be one of them.
http://www.treas.gov/offices/enforcement/ofac/civpen/index.shtml
No company, large or small, in global or internet commerce can afford to simply hide their head in the sand and pretend that this does not pertain to them. Every company should have a compliance program in place to make sure that the company is not inadvertently violating Federal laws.
There are several good OFAC compliance companies and software programs that can scan your database for a potential match to keep your company in compliance. You can also do it DIY by going to the OFAC website and downloading the available lists and checking them against your database of clients, customers and accounts. You’ve got to check new customers before fulfilling the order and it’s a good idea to check your whole database once a month. Also, each time you check your database it’s best to download the freshest copy of the Treasury Department’s list, as it constantly changes.
Be proactive and take the necessary steps to protect your business. If you want more information about OFAC compliance issues for your business click on the link below.
http://www.treas.gov/offices/enforcement/ofac/faq/answer.shtml#25
101 on Delaware
Filed Under: 101, Delaware
Tags: Court of Chancery, Delaware, Law, Tax
More businesses choose Delaware because of its favorable and business-friendly environment, which offers numerous benefits in convenience, tax liability and legal protection. Here are just a few:
- In Delaware, one person can hold the title of each of the officers of the business.
- Delaware has no requirement for a minimum balance in the company’s bank account. This is in contrast to a number of states that require a $1,000.00 minimum bank balance.
- Business owners can choose to file business formation papers anonymously in Delaware to maintain privacy.
- Delaware imposes no state income tax on a business that does not operate within the state.
- By forming a company in Delaware the “Domicile” of your company becomes Delaware and the “rules of the game” become the Delaware corporate laws as applied by the Delaware Court of Chancery. Delaware is famous for its fair and flexible corporate laws and its case law, as dispensed by the most respected business court in the country, the Delaware Court of Chancery.
- Directors are free to set any price on shares of stock they wish to sell.
- Forming a business in Delaware is straightforward and uncomplicated, and doing so online, by phone or by mail through Harvard Business Services, Inc. is easy, fast and affordable.
- Anyone can form a business in Delaware through Harvard Business Services, Inc. without ever setting foot in the state. Delaware’s Division of Corporations is the best in the world at processing business formation filings quickly and encourages entrepreneurs from across the country and around the world to form their businesses here.
