Why Delaware is the Corporate Capital

Due to a few inquires that I have received, questioning Delaware as the Corporate Capital, I post to enlighten...

Delaware has long been known as a center for corporate and commercial law and has been referred to as the "Corporate Capital of the World" because it is the state of incorporation for the majority of the Fortune 500 and most companies whose securities trade on the NYSE, Nasdaq and other exchanges.

The state's preeminence in business law has developed primarily through the work of the Delaware Court of Chancery – nationally, the forum of choice for resolving corporate disputes. The state's reputation has been enhanced in recent years by a series of business law innovations that have led to the creation of many new business entities designed to meet the needs of corporate America.

Today, the Delaware Court of Chancery issues nationally significant corporate law decisions concerning challenges to actions by boards of directors and claims of breach of fiduciary duty. The Court of Chancery handles merger and acquisition litigation and all other aspects of corporate governance and compliance with the Delaware General Corporation Law, as well as issues of individual director and officer liability.

As a consequence of the volume of incorporations in Delaware and the ability to obtain jurisdiction based on the state of incorporation, Delaware's Superior Court and the federal court in Delaware have also become popular for multiparty commercial disputes. A 2002 assessment conducted by the United States Chamber of Commerce of the court systems in all 50 states ranked Delaware No.1, noting the Delaware courts' fairness and reasonableness, competency and impartiality of the judiciary and timeliness in resolving disputes.

Beyond being the presumptive favorite for incorporation and the forum of choice for corporate litigation, over the past 20 years Delaware has also developed into one of the most significant banking centers in the United States, and is home to some of the nation's most dynamic and diversified financial services providers, including the country's most successful credit card banks.

cite - Duane Morris LLP