Delaware is the state whose corporate law is most commonly used by US public companies. Many corporations incorporate there even when their headquarters, employees, and customers are located elsewhere.
The central statute is the Delaware General Corporation Law, adopted on March 10, 1899. Delaware became especially attractive after New Jersey’s corporate-law reforms in 1913, which made that state less permissive. Delaware offered flexible governance rules, a well-developed body of judicial precedent, and a specialized Court of Chancery for business disputes.
The state’s advantage is not simply low taxes. Lawyers and investors value predictable decisions, experienced corporate judges, and rules that give boards and shareholders relatively clear guidance on issues such as mergers, fiduciary duties, and takeovers. The result is a powerful network effect: companies and advisers already understand the system, encouraging more companies to choose it.
Incorporation is also commonly confused with a company’s headquarters. A Delaware corporation may conduct almost no everyday business in Delaware while remaining governed internally by Delaware corporate law.