Why Incorporate in Delaware?

1. Flexibility of corporate law: Delaware's laws are adaptable and known across the country.
2. Detailed case law: Offers legal clarity and predictability.
3. Director-friendly: Favorable for directors when legal conflicts arise.
4. Responsive Secretary of State: Facilitates fast and efficient bureaucracy.
5. Investor requirements: Many investors, especially VCs, prefer Delaware incorporation.

Corporate Governance Overview

Board of Directors

• Elected by stockholders and responsible for overseeing corporate operations.
• Approval authority: Important decisions require Board—and sometimes stockholder—approval.
• Director selection: Limit number to avoid logistical issues and avoid directors demanding monetary compensation.

Officers

• Appointed by the Board and responsible for executing the business strategy.
• Mandatory offices: President and Secretary are the only required positions in Delaware.

Board of Advisors

• Alternative to Board of Directors: Include industry experts without formal governance responsibilities.
• Benefits: Leverage credibility and expertise without governance burden.

Required Approvals in Delaware

Board Approval Required

• Amend Certificate of Incorporation.
• Enter fundamental corporate transactions (e.g., mergers).
• Appoint officers and issue securities.
• Enter significant agreements.
• Compensation/arrangements with officers.

Stockholder Approval Required

• Amend Certificate of Incorporation.
• Enter fundamental corporate transactions.
• Elect Directors (with some exceptions for vacant seats).
• Establish/amend stock option plans.
• Approve interested director transactions.