Delaware and Wyoming are two of the most popular states for business incorporation due to their favorable laws. Here's how they compare.
Delaware advantages:
The Court of Chancery provides specialized, efficient business dispute resolution without juries. Extensive, well-developed body of corporate case law provides predictability. Most preferred by venture capital and institutional investors. Strong privacy protections — officers and directors don't need to be listed publicly.
Delaware drawbacks: Annual franchise tax can be significant for larger companies (minimum $400, calculated by authorized shares or assets). Must maintain a registered agent in Delaware. If operating in another state, you'll still need to register as a foreign entity there.
Wyoming advantages:
No state income tax (personal or corporate). No franchise tax. Extremely low annual report fee ($60 or 0.02% of assets, minimum $60). Strong asset protection laws for LLCs. Lifetime proxy provisions for corporations.
Wyoming drawbacks: Less established body of business case law. May not carry the same prestige with institutional investors. The court system lacks a specialized business court.
Bottom line: If you're seeking VC funding or plan to go public, Delaware is typically the better choice. For small businesses, LLCs, and asset protection, Wyoming often provides better value.