• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Learn About Real Estate Investing. For Everyone.

  • Raise funds
  • Change
  • Advisors
  • Learn
    • What we’re reading
    • Podcasts
    • Investing
    • Impact investing with Eve
    • News
    • Creative economy
    • Opportunity Zones.
    • Everything
  • FAQs
    • FAQ for investors
    • FAQ for foreign investors
    • Glossary
    • The Reg CF rules
  • About
  • Home
  • Show Search
Hide Search

Why Delaware?

January 29, 2018 by Small Change


Mark Roderick is one of the leading crowdfunding and fintech lawyers working today. His widely-read blog includes a wealth of legal and practical information for portals and issuers. He also speaks at crowdfunding events across the country and represents industry participants both nationally and internationally. The below guest blog from Mark, originally published on his site, looks at why most crowdfunding entities are formed in Delaware. Let’s see what he has to say.


Why are most crowdfunding entities formed in Delaware? Two reasons.

First, Delaware has very good business laws and a very good system for adjudicating business disputes. Here’s what I mean:

  • Delaware’s business laws – and by that I mean the laws governing limited liability companies and corporations – are very flexible. In the hands of a capable corporate lawyer, Delaware’s laws can be used to do just about anything you want to do, i.e., can implement just about any business deal.
  • For better or worse, Delaware’s laws are tilted in favor of management. That means those running the show – and those running the show pick where the entity is incorporated – can get more or less what they want. As an example, Delaware allows the manager of a limited liability company to disclaim all fiduciary responsibilities to the members. Most states do not.
  • Delaware has a whole court system devoted to adjudicating disputes among business entities and their owners and managers. In most states, the judge hearing a business dispute in the morning is hearing auto accident cases all afternoon and is probably a former personal injury lawyer herself. First among the country’s business-only courts, Delaware’s Court of Chancery enjoys a deserved reputation for professionalism.

Second, because Delaware entities are used so widely, lawyers across the country are familiar with Delaware law. If two real estate investments are offered on a Crowdfunding portal, one incorporated under Delaware law and the other incorporated under Missouri law, the Delaware company has a head start in attracting investors solely on the basis of familiarity, at least outside Missouri.

There is one important exception. Under Federal Rule 147, an entity raising money through the intrastate Crowdfunding exemption of State X must be incorporated in State X, not in Delaware.

 Visit www.crowdfundattny.com for more.


Image by Ken Lund, CC BY-SA 2.0 / modified from original


LEARN SOME MORE….

Primary Sidebar

Sharing luxury.

Are cities really over?

Investing long-term, with the crowd.

Follow

@OurSmallChangeFollow

Small Change

Shared Estates is a carbon-neutral developer modernizing #luxury estates for the sharing economy. The Freeman Berkshires is their latest project. #Invest (if you are over 18) at http://SmallChange.co. https://bit.ly/320mOqh

The line between traditional banking and less traditional #financial providers has been blurred by #connectivity and #technology, writes Eve Picker, founder of Small Change.
https://bit.ly/2BdtS8X

#Affordable housing is in crisis. You can #invest in change (if you are over 18). Learn about @dwellerhomes ADUs and @PatrickQuinton at http://SmallChange.co. https://bit.ly/34l1mxW

Load More...

More

  • You can read Eve’s bio and download her image and the Small Change logo here.

Search by tag

affordable housing community creative economy crowdfunding design environment equity finance impact investing mobility opportunity zones our offerings podcast technology video zoning
  • Home
  • About
  • Privacy Policy
  • Terms of Use
  • Contact