Legal Question in Tax Law in Delaware

Delaware or Virginia?

My partners and I want to create an LLC and are considering where we should headquarter. We are looking to what the benefits/detriments are between Delaware vs. Virginia. Beyond knowing the generalities of how Delaware offers tax incentives for companies, we are unsure of specifics. To incorporate a service-based firm, we would like to understand why we should consider one state over the other. Any help would be greatly appreciated.

Asked on 11/19/06, 3:33 pm

1 Answer from Attorneys

Robert DiPaolo The Fidelis Group, LLC

Re: Delaware or Virginia?

You ask a good quesiton. The tax advantages of forming an LLC in Delaware are not tax incentives per se, but rather that the only tax you will pay is an annual franchise tax. As to Virgina, you would need to consult a Virgina lawyer, or someone willing to do the reasearch (see below). Beyond the question you have asked, you also need to focus on where you will do business, since you will have to register your LLC in each such state as a foreign LLC licensed to do business there. There are many other issues to be taken into consideration, depending on the specifics of your business plan. If you would like assistance with this matter and/or related matters, please feel free to contact us at [email protected] We are experienced in all aspects of Delaware Corporation and LLC law, and could assist you with organizing your LLC there or else were and complying with legal reguirments in each such jurisdiciton.

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Answered on 11/20/06, 5:14 am

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