There are many reasons why more companies are organized in Delaware than in any other state. Delaware law provides a great deal of flexibility with respect to the formation of corporations and the rights and duties of board members and shareholders. The formation documents are quite brief compared to those of other states and do not require the disclosure of officer and director names. As angel investors and venture capitalists tend to prefer to invest in companies that are formed in Delaware, and certain investment bankers may even insist on a company being organized in Delaware or converting to a Delaware domestic entity. However, it is just as important to weigh the advantages of forming in Delaware against certain disadvantages. For example, Delaware entities must maintain a registered agent with a physical address in Delaware for service of process, pay annual franchise taxes, register as a foreign entity in Massachusetts, and comply with reporting requirements in both Delaware and Massachusetts.

The Harbor Law Group, working in tandem with your accountant, can help you evaluate whether your business should be formed in Delaware or Massachusetts.