http://www.it-startup.com
The first online Community for European IT startups, especially software and Internet companies, that want to expand into the U.S. market.


purpose
topics
  marketing
  sales
  human resources
  culture
  financing
  legal
newsletter
reading list
download
contact
home

 
  Culture  
     
  Should I form a wholly-owned subsidiary of my European parent company in Delaware or another state?
 
 

The answer to this question depends on many factors. If the subsidiary will always be wholly-owned by the European parent, the choice of state of incorporation is probably not too important from a corporate law perspective, because there is no need for very developed corporate law and special courts as there probably will not be any relevant disputes. In these cases, the state of incorporation should generally be Delaware or the state of the principal office of the subsidiary. The state of the subsidiary's principal office may be more convenient and cost effective, and may have some tax advantages. In these cases, the European parent company should consult with local counsel and tax advisors before deciding between Delaware and another state.
Final Note: Companies incorporated in one state can be "reincorporated" in another state by merging the company into a company formed in the other state. This may get complicated in some cases, but it means that the state can be changed if necessary or desirable.

By John Pomerance, Attorney at Law.
If you have questions, you can e-mail John at jrpomerance@mintz.com.

 
     
  Questions?  
Back: Financing

     
     
     
   
 
 
   
     
Copyright 2000 IT-Startup.com. inc. All rights reserved.