What Are The Legal Reasons For Companies and Startups Located in India And Doing Business in the United States Seeking to Form Corporations and Incorporate in Delaware.
As a leading Delaware Incorporation Startup lawyer, Andrew S. Bosin assists, represents and provides legal advice to software licensing, startup, SaaS, Internet of Things (IoT) and technology companies located in India on how to form, start and incorporate a C Corp in Delaware.
Here are some of the reasons why Indian technology and software Companies want to incorporate in Delaware.
Companies in India are no longer relying upon third party US companies to sell or promote their goods on their behalf in the states. Indian companies are proactively putting stakes in the ground in New Jersey, New York, Delaware and other states. One of the issues facing foreign companies is where to incorporate. If an Indian company advises that they are going to need to raise capital I would recommend that they incorporate in Delaware as a C Corporation and then register to do business as a Foreign Corporation in whatever other state they are located in.
Both shareholder and VC’s prefer to incorporate startups in Delaware because it offers C-corps the greatest flexibility in terms of structuring boards of directors, stock issuance and preference, and voting rights. It also provides the broadest privacy protections. Specifically, there is no requirement to list director or officer names on formation documents. These reasons, whether you are a business in India or Chicago should serve as good reasons to incorporate in Delaware.
How does a C Corp compare to an LLC in terms of how the two entities deal with ownership? If your company is an LLC it typically has 100 membership units and those units are distributed to the members/owners. It is complicated in an LLC to assign or sell stock to a third party such as a VC once the LLC has been incorporated and an operating agreement has been signed by the members. On the flip side, it takes some legal work but issuing shares in a Delaware C Corp is relatively easy unless it involves a complicated financing deal such as an A Round. Startups also like the C Corp because it is easy to vote and make decisions. Its as simple as noticing a meeting of the shareholders then proposing a resolution and then taking a vote.
For these reasons and more, investors and VC’s prefer companies that have been incorporated in Delaware as C-Corps.
Business and Startup Incorporation Attorney Andrew S. Bosin works with businesses and startups located in Bangalore and Mumbai, India seeking to form a business or incorporate as a C Corporation in Delaware that are in all stages of development, including early stage, pre-seed, pre-funding, pre-revenue and/or with a product developed. We have worked with a wide range of businesses, including:
- Information Technology (IT) Contractors
- SaaS Software as a Service Providers
- Mobile App developers, creators and makers
- Software Developers
- Software App Developers
- Blog, Websites, E-Commerce and other Internet Businesses and Content Providers
- Biotechnology Businesses
- Healthcare Technology Software Businesses
Andrew S. Bosin, Esq. is a business, technology, software and startup lawyer in New Jersey who represents companies from India.