| year the United States Chamber of Commerce | | | | of course, is that if you are a legitimate business you |
| announces which States have the best and worst | | | | could get inappropriately labeled as unsavory simply |
| legal system. For the fifth year in a row, Delaware has | | | | because you have incorporated in Nevada. |
| received the top honors, being named the State with | | | | Additionally, many, if not most of the Nevada |
| the fairest legal system. Additionally, a survey of U.S. | | | | companies who help individuals set up companies, tout |
| businesses ranked Delaware as the State doing the | | | | the fact that when you file a Nevada LLC the owners |
| best job of creating a fair and reasonable legal | | | | of the LLC can remain anonymous. To some, such |
| environment. As many of the top businesses in the | | | | anonymity may be helpful, but the Nevada promise is |
| United States, and a growing number of small and | | | | misleading at best and completely disingenuous at |
| medium sized businesses, have chosen Delaware as | | | | worst. While you can anonymously create a Nevada |
| the place to incorporate, that ranking should not come | | | | LLC, the company must provide the Secretary of |
| as a big surprise. | | | | State with the names and addresses of each |
| The results of the 2006 study, which was officially | | | | manager or managing members on or before the last |
| conducted for the United States Chamber Institute for | | | | day of the first month after the filing of the Nevada |
| Legal Reform by The Harris Poll, surveyed a national | | | | LLC. See Nevada Revised Statutes 86.263. Therefore, |
| sample of in-house general counsel or other senior | | | | the promise of anonymity in Nevada can be a hollow |
| corporate litigators to explore how reasonable and fair | | | | promise. |
| the legal system is perceived to be by U.S. business. In | | | | While anonymous ownership may not be important to |
| order to ensure the integrity of the results, respondents | | | | all, in some situations there can be a legitimate business |
| were first screened for their familiarity with States, and | | | | interest in keeping matters private. Unlike Nevada, |
| those who were very or somewhat familiar with the | | | | Delaware truly does offer an answer to those in |
| litigation environment in a given State were then asked | | | | search of privacy. Simply stated, in Delaware, if you |
| to evaluate that State. | | | | want to create an anonymous LLC you can do just |
| When deciding where to incorporate, there are a | | | | that. No where in the Delaware laws is there any |
| number of considerations that businesses must take | | | | requirement that the managers or members be |
| into account. Perhaps the single most important | | | | identified in any filing. In fact, the Delaware law relating |
| consideration for any business is the legal environment | | | | to the formation of LLC's specifically says that the |
| within the incorporation State. Over the past few | | | | names of the managers or members may be included, |
| years, several States have tried to create more | | | | but are not required. See Delaware Code § |
| favorable climates for businesses; but year after year, | | | | 18-102. Therefore, if anonymity is what you want then |
| it is Delaware that provides the most fair and | | | | Delaware is the place to incorporate, not Nevada. |
| competent judges, the best and most efficient handling | | | | When deciding to incorporate in Delaware, companies |
| of litigation proceedings and juries that are competent, | | | | of all sizes receive the benefit of the most developed |
| fair and predictable. It is also Delaware that provides | | | | business laws in the United States. The Delaware |
| the most flexible and business-friendly incorporation | | | | Chancery Court is renowned throughout the country |
| laws, including minimal regulation and minimal yearly filing | | | | for its handling of complex business matters. In fact, |
| requirements. (visit | | | | other States attempting to copy Delaware's |
| Recently, formation companies in the State of Nevada | | | | successful business climate turn to and defer to the |
| have been mounting an advertising campaign to drive | | | | Delaware Chancery court and its rulings, thereby |
| businesses into the desert, touting the State's minimum | | | | acknowledging the superior climate provided to |
| regulation. What is missing from Nevada, however, is a | | | | businesses by the State of Delaware. |
| fair, competent and predictable legal environment. In | | | | Where you incorporate is a big decision, but for |
| fact, in 2006 Nevada ranked worst among the States | | | | companies of all sizes Delaware has made the |
| in terms of creating a fair and reasonable legal | | | | decision very easy. Whether you are a start-up |
| environment while ranking 37th overall. Additionally, | | | | business, family business, small business, large business |
| according to several magazine publications, venture | | | | or subsidiary, Delaware is the place to incorporate. |
| capitalists and angel investors they will all routinely | | | | Whether you are forming a LLC, a partnership, a |
| throw away business plans they receive from | | | | general corporation or a C-corporation, you will benefit |
| companies incorporated in Nevada. What this means, | | | | from the nation's premier legal system. |