Over 50% of U.S. publicly traded corporations and 60% of the Fortune 500 companies are incorporated in Delaware; the state’s attractiveness as a corporate haven is largely because of its business-friendly corporation law. Franchise taxes on Delaware corporations supply about one-fifth of its state revenue. Although Delaware is ranked first tax haven in the world by Tax Justice Network, it is not listed on the OECD’s 2009 “Black List”, despite objections of Luxembourg’s and Switzerland’s authorities.
The Delaware Constitution establishes a number of courts:
The Delaware Supreme Court is the state’s highest court.
The Delaware Superior Court is the state’s trial court of general jurisdiction.
The Delaware Court of Chancery deals primarily in corporate disputes.
The Family Court handles domestic and custody matters.
The Delaware Court of Common Pleas has jurisdiction over a limited class of civil and criminal matters.
Minor non-constitutional courts include the Justice of the Peace Courts and Aldermen’s Courts.
Significantly, Delaware has one of the few remaining Courts of Chancery in the nation, which has jurisdiction over equity cases, the vast majority of which are corporate disputes, many relating to mergers and acquisitions. The Court of Chancery and the Supreme Court have developed a worldwide reputation for rendering concise opinions concerning corporate law which generally (but not always) grant broad discretion to corporate boards of directors and officers. In addition, the Delaware General Corporation Law, which forms the basis of the Courts’ opinions, is widely regarded as giving great flexibility to corporations to manage their affairs. For these reasons, Delaware is considered to have the most business-friendly legal system in the United States; therefore a great number of companies are incorporated in Delaware, including 60% of the companies listed on the New York Stock Exchange. Delaware was the last US state to use judicial corporal punishment, in 1952.