Small Business Reading Room

Wednesday, December 22, 2004

Delaware Courts

Many people choose to incorporate in Delaware because of its Court system. But, have you ever wondered what types of cases are tried in the various Courts? Well, now you can find out. The Delaware Courts make their opinions available online to the general public.

Throughout the various Courts you can find cases about negligence, breach of contract and more. One big case currently being tried in Delaware involves The Walt Disney Company. Some might be interested to know that this isn’t the only case involving The Walt Disney Company to be tried in Delaware recently.

In the summer of 2004, Roy E. Disney v. The Walt Disney Company was heard in the Court of Chancery. Roy E. Disney is a shareholder of the company who wanted to make certain books and records of The Walt Disney Company public. Roy E. Disney wanted to make these items public “for the purpose of investigating suspicious or mismanagement or waste of corporate assets.” The Walt Disney Company, however, deemed the items to be confidential. The Court found in favor of The Walt Disney Company, stating that shareholders “cannot use confidential information received for the proper purpose of investigating and seeking to remediate wrongdoing for the purpose of being a self-appointed publisher of the Company’s proprietary information.”

The website provides the actual documents filed in the court. It can be interesting reading, if you don't mind reading through the legalese.

Tuesday, December 21, 2004

What's in a Name? Hard work

When you come up with a name you are happy with for your corporation or LLC, you will want to protect it, as I said in an earlier post.. But more than anything else, you will want to use it in commerce.

Finding a name to use for your entity can be a trying process. But, Delaware Intercorp, Inc. is here to help. We can clear and reserve your chosen name for you online, and if you ask for it, we would gladly help you look over some alternatives in the Delaware Division of Corporations Database. When we look into the system, we can see all the names that are taken and some that were taken in the past and have since been abandoned.

Abandonment on the Division database means the company using the name in question went void for one reason or another and no longer exists. Abandonment is more incentive to check thoroughly into any trademark problems, not less.

If your chosen name is not available, there are a variety of ways to modify the name to make it work. The Division of Corporations uses a literal database with exclusions. Simply adding an "S" to make a plural of one word in your name may make the system accept your name. The name you use must be distinguishable on the database, that is all. The State of Delaware does not reject sound alike or look alike names. Remember that these rules are significantly different from the trademark rules.

You can usually find a descriptive or fluff word to add to your name to distinguish it on the database. If you chose Dragonfly, Inc. - and that name is taken - you could add a descriptive word like "publishers" for a printing company. Perhaps Dragonfly Publishers, Inc. is available.

If you use initials in your name, consider expanding all or some of them in your name. Or, you may consider using initials instead of whole words.

Some common suggestions that do NOT work are adding "The" and changing the corporate identifier. The State ignores use of the word "the" in entity names. So "The Delaware Company" is the same on the database as, "Delaware Company".

Another frequent suggestion is to use a different identifier, Corp, for Inc. or Corp. for Corporation. The State considers all identifiers to be equivalent. So Corporation, equals, Corp., Company, Co., Ltd. et cetera. In the end, even "The Delaware Company" equals "Delaware Inc." so both of those names could not exist on the database at the same time.

The name you use for your corporation will be the name that must be on any official contracts and corporate documents. Remember that before you chose a name that is a mile long. This is becoming a worldwide problem as outlined here. But please feel free to call and talk to one of our incorporators about your naming issues. We are here to help.

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Delaware Intercorp, Inc.
113 Barksdale Professional center
Newark, DE 19711-3258

"For all the best reasons to incorporate,the best place
is Delaware and the best incorporator is
Delaware Intercorp!"

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