Small Business Reading Room

Friday, January 14, 2005

Business License Renewals

Yes, it really is 2005.

If you haven't already taken care of the annual maintenance of your corporation or limited liability company, now is the time to get it done.

Did you know that you can renew almost any current Delaware business license online with the Delaware Division of Revenue? You can visit this link for questions and answers about Delaware business license renewals.

If you are a Delaware Intercorp business presence customer, contact Melissa to make sure that you renew your service for the coming year.

Thursday, January 13, 2005

Where is YOUR Business?

Rich Karlgaard of Forbes Magazine has frequently written about how digital technology allows more and more people to live where they want and earn money from all over the globe.

Further information you may find interesting is now available at regarding the least affordable housing markets in the United States. The Wall Street Journal of January 12 outlined the study’s' findings that there are several places where the median income person could afford only 50% or so of the price of the median house. I guess it is not surprising that fully 20 of the 29 least affordable housing markets are in California. Mr. Schwarzenegger has a long way to go !

On the other end of the scale, the depressed areas of New York offer some fine housing values if you can find a way to earn an income somewhere else. The median income person can afford 300% of the price of the median house in places like Elmira and Jamestown. Fully 6 out of the 10 most affordable housing markets are in upstate New York.

It is interesting that the housing markets that are at the extreme edges are in two of the highest tax states in the nation. I wonder if there is causation here?

Further Fine Tuning the Law

Last year the Delaware General Assembly passed several bills that fine tuned the Partnership, Limited Partnership and Limited Liability Company statutes.

The 2004 amendments to the Delaware Revised Uniform Partnership Act, Limited Liability Company Act and Revised Uniform Limited Partnership Act clarify several matters affecting the treatment of fiduciary and other duties. First, the statutes now make explicit that the governing agreement (partnership agreement, limited partnership agreement or limited liability company agreement) can eliminate, as well as expand or restrict, fiduciary or other duties. At the same time, the amendments make clear that the implied contractual covenant of good faith and fair dealing cannot be eliminated by agreement.

The 2004 amendments also clarify the effect of good faith reliance on the provisions of the governing agreement, specifying that such reliance, absent contrary provision in the agreement, precludes liability for breach of fiduciary duty.

Finally, the 2004 amendments confirm that the governing agreement may limit or eliminate any and all liabilities for breach of contract and breach of fiduciary duty, except for liability for an act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.

Rights of Persons Not Parties to a Governing Agreement

The 2004 amendments to the Delaware Revised Uniform Partnership Act, Limited Liability Company Act and Revised Uniform Limited Partnership Act clarify that the governing agreement of the business organization may confer enforceable rights upon persons who are not parties to the agreement, including rights to approve amendments to the agreement.

Wednesday, January 12, 2005

A Constitutional Amendment

The Delaware General Assembly has passed, and the Governor has signed an amendment to the State Constitution that removes the restrictions that were in place on the type of consideration that companies could accept in return for stock.

The amendment is available on line and simply states that Article IV, Section 3 of the State Constitution is removed. The Delaware General Assembly completed the process of eliminating a long-standing provision of the Delaware State Constitution that prohibited a corporation from issuing stock "except for money paid, labor done or personal property, or real estate or leases thereof actually acquired by such corporation." Because of the availability of stock with nominal or no par value, this provision has had little practical importance.

With the elimination of that constitutional provision, the Delaware General Corporation Law has been simplified to provide that stock will be considered fully paid and non-assessable upon receipt by the corporation of the consideration determined by the board of directors.

Once again, the Corporations Law Section of the Delaware State Bar Association is keeping Delaware on the leading edge of corporate law.

A list of all amendments relating to Delaware entities is available from the Division of Corporations.

Corporate Franchise Tax Notices are in the mail

The corporations franchise tax notices have been mailed. Delaware Intercorp, Inc., received them from the State, sorted them all out and notified our customers by email.

Corporations must pay the franchise tax by March First every year. If your franchise tax notice does not get to you before the deadline, you may pay online at

The notices for limited liability companies will be printed by the State in February and we will get them out to LLC owners as soon as possible. If you have changed address in the past year, please send a note to Barbara at to keep us up to date.

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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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