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Business Formation - New York vs. Delaware

The Pros and Cons of Forming an Entity In Both States


A common question amongst start-ups and business clients is where they should form their entity, whether it be a corporation or a limited liability company (LLC). Frequently, they have the preconceived notion that Delaware is the best state in which to form an entity, and while it may be for some, it likely isn’t for the vast majority of people conducting business in New York.


While Delaware has rightfully enjoyed a long history of preeminence as the jurisdiction of choice to incorporate amongst the rarefied world of Fortune 500 and public traded companies, due to its well-developed, business-friendly laws, Court of Chancery devoted to business disputes with sophisticated jurists, and measures of confidentiality to protect the identity of the principals forming such entities, many of these perceived advantages are now available in many states, including New York, due to the overhaul of their business laws and court systems during the last twenty-five years. 


Indeed, the Commercial Division of the New York State Supreme Court, which is a trial level court,  was formed in 1993 to enhance the quality of judicial adjudication and to improve efficiency in the case management of commercial disputes that are litigated in New York State courts. Since then, the Commercial Division has become a leading venue for judicial resolution of complicated commercial disputes. Successful resolution of these disputes requires particular expertise across the broad and complex expanse of commercial law. Because disclosure in commercial cases can be complicated, protracted and expensive, particularly in light of electronic discovery, the Commercial Division makes use of vigorous and efficient case management. The court sets deadlines and generally enforces them, managing discovery as needed to protect the rights of the parties to fair disclosure while minimizing expense and delay. 


The Commercial Division also utilizes an Alternative Dispute Resolution Program ("ADR") in which Justices may send matters to ADR at any time upon an order of referral. And detailed rules and protocols, and rosters of seasoned ADR neutrals, have been established in many jurisdictions around the State.

The Law Office of Steven Riker represents clients throughout the New York metropolitan area, including the counties of New York (Manhattan), Kings (Brooklyn), Queens, Bronx, Westchester, Nassau, and Suffolk, from offices conveniently located in midtown Manhattan and White Plains, New York.

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