Delaware, a small American state at the heart of the saga between Twitter and Elon Musk

Delaware, a small American state at the heart of the saga between Twitter and Elon Musk

Twitter is trying to force Elon Musk to keep his promise to buy the social media giant.

It was in Delaware that the first legal action in the dispute between Elon Musk and Twitter opened on Tuesday. But why does this tiny eastern US state find itself at the heart of a trillion-dollar saga?

Legal home to thousands of large corporations, Delaware is known for its favorable tax system and renowned legal system for resolving corporate disputes.

Nestled on the east coast, just under two hours drive from the federal capital Washington, Delaware was chosen by Twitter in 2007 to establish its headquarters there, rather than California, where the social network nevertheless has its operational headquarters.

And the firm with the blue bird is far from being the only one to have made this choice: the beverage giant Coca-Cola, the world leader in distribution Walmart, or even the aeronautical juggernaut Boeing… All are registered in Delaware.

According to official statistics from the Delaware Business Service, more than 1.6 million businesses have legal residency in the state. This is far more than the number of its inhabitants, close to 970,000.

More than two-thirds of the Fortune 500 list of the largest American companies have chosen Delaware as their legal domicile.

A simple mailbox is however often the only reminder of the presence of all these companies in the State.

Among the reasons that lead so many businesses to register on the Delaware Registry is the state's reputation for the ease and speed with which it can process corporate registration. a company.

For US$1,000, the Delaware Companies Service can register a new entity in one hour flat. Completed in just one day, normal service costs US$100 to US$200.

Firms choose Delaware not for a single reason, but because we provide a complete package registration services, states the state on its official website.

But this ease of procedure comes at the expense of transparency. Delaware does not require the name of the actual beneficiary when registering, and therefore allows companies with little transparency to guarantee near total secrecy to their owners.

Shell companies are thus flourishing on the very soil of the United States, as revealed by the Panama Papers in 2016.

And this opacity is accompanied by a very advantageous tax policy for companies.

If a company does not conduct its operations in the State [which is the case for the majority of them], it will not have to pay tax on its income, but will instead pay a franchise tax, which is much more moderate.

For these reasons, Delaware is often considered a corporate tax haven.

With this influx of companies, a whole legal ecosystem has developed in Delaware, allowing it to acquire a reputation for excellence in handling disputes. x27;companies.

The Musk-Twitter affair will thus depend on the Delaware Court of Chancery, a court specializing in business law, established in 1792 on the model of the British Court of Chancery.

The Delaware Court of Chancery is widely recognized as the preeminent forum in the United States for the adjudication of disputes involving the internal affairs of thousands upon thousands of #x27;businesses and other Delaware entities, boasts the institution on its own site.

Its unique skill and experience in matters of business law is second to none, she also highlights, since her seven judges are specialists in business litigation.

And notable fact at the x United States, this court never uses a jury to decide.

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous post Twitter vs. Elon Musk: First legal face-off
Next post Montreal girl assault: Tanvir Singh found not criminally responsible