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  Culture  
     
  Why do most U.S. tech companies incorporate in Delaware?
 
 

Delaware is the choice for most U.S. tech companies because out of the 50 states, Delaware has the most developed corporate law, and the most experienced courts dedicated to resolving corporate law questions. All 50 states have corporation laws, and they generally follow similar principles. However, in most states, there have been relatively few cases decided under the state corporate laws. Also, in most states, there are no special courts dealing with corporate law issues. Delaware has the most case law and the most experienced judges in a judicial system, with certain courts dedicated to corporate law. Also, Delaware law is generally favorable to corporations as opposed to the laws of other states, which often favor shareholders.
Finally, investment bankers and venture capitalists prefer to deal with companies formed in Delaware for all the reasons noted above.

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

 
     
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