State of Incorporation Questionnaire

 
Where is your company's primary location?

     California

     Delaware
If necessary, how feasible would it be to change your company's primary location?

     Not at all feasible

     Somewhat feasible

     Very feasible

"Primary location" refers to the company's principal place of business, also known as its "nerve center" - the place where a corporation's high-level officers direct, control, and coordinate the corporation's activities.

Step 2

 
Do the books of the corporation demonstrate that shareholders with California addresses own more than 50% of your company's outstanding voting securities?

     Yes

     No

     Not Sure

Step 3

 
Does your company intend to have only one director but more than one shareholder?

     Yes

     No

     Not Sure

Delaware corporations may have one director and more than one shareholder. California corporations may have one director when there is only one shareholder, but must have at least two directors when there are two shareholders and at least three directors when there are three or more shareholders.

Step 4

 
Do you estimate your business structure or model to be straight-forward (i.e., simple) or complex?

     Straight-forward

     About half-way in between

     Complex

Delaware business law is developed and relatively advanced, which is arguably more important for complex business structures or models.

Step 5

 
Does your company intend to seek venture capital financing?

     Yes

     No
How certain are you of whether your company intends to seek venture capital financing?

     Not certain

     Somewhat certain

     Certain

Venture capital firms provide venture capital as seed funding to early-stage, high-potential growth companies. Please indicate whether your company will seek venture capital.

Step 6

 
Do you prefer minority shareholders to have relatively weaker shareholder rights or relatively stronger shareholder rights?

     Relatively weaker rights

     Relatively stronger rights

     Either

How important is the issue of minority shareholder rights to your company?

     Not important

     Somewhat important

     Very important

Delaware generally has more flexibility for corporate structuring that minimizes the impact of dissenting shareholders. Both states have laws that protect the rights of minority shareholders against bad faith or officers' or directors' breaches of duty.

Conclusion