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When starting a new business, one of the most important decisions that an entrepreneur will have to make is what type of legal entity to form. In the United States, two of the most popular options are the Delaware C-Corporation and the Delaware Limited Liability Company (LLC). Both of these legal structures have their own unique advantages and disadvantages, and the choice of entity will depend on the specific needs and goals of the business.

The Delaware C-Corporation is one of the most popular types of legal entities for startups, particularly in the technology industry. According to data from the National Venture Capital Association, 43% of venture-backed companies in the United States are structured as C-Corporations. One of the key advantages of a C-Corporation is that it offers limited liability protection for the company’s shareholders, which means that they are not personally liable for the company’s debts and obligations. Additionally, C-Corporations are taxed as separate entities, which allows for greater flexibility in terms of raising capital and issuing stock.

Another advantage of the C-Corporation is that it is well-suited for companies that plan to go public or be acquired by a larger company. This is because the stock structure of a C-Corporation is more flexible than that of an LLC, and it is easier to transfer ownership of a C-Corporation through the sale of stock.

However, there are also some disadvantages to forming a Delaware C-Corporation. One of the biggest drawbacks is the potential for double taxation. C-Corporations are subject to corporate income tax on their profits, and then shareholders are subject to individual income tax on any dividends that they receive. Additionally, C-Corporations have more extensive recordkeeping and reporting requirements than other types of legal entities.

On the other hand, the Delaware LLC is another popular option for entrepreneurs, particularly for those who are looking for a more flexible legal structure. According to data from the Small Business Administration, LLCs accounted for 57% of all new business formations in the United States in 2019. One of the key advantages of an LLC is that it offers pass-through taxation, which means that the business’s profits are only taxed once, at the individual level.

Another advantage of an LLC is that it offers more flexibility in terms of management and ownership structure. In an LLC, the owners are referred to as members, and they can choose to manage the business themselves or hire professional managers to do so. Additionally, LLCs do not have as many recordkeeping and reporting requirements as C-Corporations.

However, there are also some disadvantages to forming a Delaware LLC. One of the biggest drawbacks is that LLCs do not offer the same level of limited liability protection as C-Corporations. While the LLC does protect the personal assets of the members from business debts and obligations, they can still be held personally liable for their own actions or negligence.

In order to determine the best legal structure for a new business, entrepreneurs should carefully consider their specific goals and needs. For example, a tech startup that plans to raise venture capital and eventually go public may be better suited for a Delaware C-Corporation, while a small business that values flexibility and pass-through taxation may be better off forming an LLC.

In addition to considering the advantages and disadvantages of each legal structure, entrepreneurs should also take into account the costs of forming and maintaining the entity, as well as any legal and regulatory requirements that may apply.

Overall, the choice between a Delaware C-Corporation and an LLC will depend on the specific needs and goals of the business. While each structure has its own advantages and disadvantages, the right choice can provide the foundation for long-term success and growth.

Regville Associates offers end-to-end legal, tax and secretarial service for companies. We assist Companies in becoming and staying regulatory compliant.

Feel free to contact us.

Tolulope Oguntade 
Regville Associates 


Welcome to Delaware – Endless Discoveries

Delaware incorporation has become a common trend among Nigerian startups in recent years, and for good reason. The state of Delaware has a business-friendly environment that offers many benefits to startups, including strong legal protections, tax advantages, and access to a well-established legal system.

According to a recent report by Crunchbase, over 60% of Nigerian startups that have received funding have been incorporated in Delaware. This trend is a significant shift from a few years ago when most startups in Nigeria were incorporated locally. So, what has caused this shift, and why are more Nigerian startups incorporating in Delaware?

One significant factor contributing to the popularity of Delaware incorporation is its strong legal system, which provides businesses with significant protection. Delaware courts are well-known for their expertise in corporate law and their willingness to rule in favor of businesses. Additionally, Delaware has a well-established legal infrastructure that provides fast, efficient, and consistent court decisions, which is essential for startups looking to establish and grow their business.

Another reason why more Nigerian startups are choosing Delaware incorporation is the tax advantages it provides. Delaware has no sales tax, and its corporate income tax is relatively low compared to other states in the US. This means that startups can save money on taxes, which can be reinvested back into their businesses.

Moreover, Delaware is home to many venture capital firms and investors, which makes it an attractive location for startups looking to raise capital. Many investors prefer investing in Delaware-incorporated companies because of the legal protections and other benefits it provides.

Finally, incorporating in Delaware can also provide a level of credibility to startups. By incorporating in a state known for its business-friendly environment, startups can signal to investors and customers that they are serious about their business and are willing to take the necessary steps to protect their interests.

To illustrate the trend of Nigerian startups incorporating in Delaware, we can look at some examples. Flutterwave, a Nigerian fintech company that raised $170 million in a recent funding round, is incorporated in Delaware. Another example is Paystack, a Nigerian payments startup that was acquired by Stripe in 2020 for over $200 million. Paystack was also incorporated in Delaware.

In conclusion, the trend of Nigerian startups incorporating in Delaware is a significant shift in the country’s startup ecosystem. The benefits of incorporating in Delaware, including strong legal protections, tax advantages, access to venture capital firms, and credibility, are driving more and more Nigerian startups to incorporate there. As Nigeria’s startup ecosystem continues to grow, it is likely that more startups will follow this trend and choose Delaware incorporation as their preferred option.

Regville Associates offers end-to-end legal, tax and compliance service for companies. We assist Companies in becoming and staying regulatory compliant.

Feel free to contact us.

Tolulope Oguntade 
Regville Associates 


The Delaware Flip


Why do Flutterwave, Paga, Paystack, Kuda, Cowrywise, Andela, Ulesson, Shuttlers and a host of others have their Parent/Holding Company in Delaware, United States?

Interestingly, over 70% of StartUps that are incorporated outside Africa are based in Delaware, United States (Disrupt Africa).

According to Forbes Advisor, Delaware has become internationally recognized as a corporate paradise and is “home” to such famous firms as Amazon, Google, Tesla, Walmart, American Express and Disney, to name just a few. Interestingly, 68% of Fortune 500 companies and 93% of all U.S.-based initial public offerings are registered in Delaware United States.  

So, what is the fuss about Delaware, United States?

1. CONDITION PRECEDENT TO FUNDING: To get funded, most Venture Capital (VC) requires your Company to be incorporated outside Nigeria, and form a Holding-Subsidiary Relationship, the Delaware Company becomes the Holding Company and the Nigeria Company a subsidiary.

Here is an extract from Y Combinator FAQ Page

What if we incorporated as a non-US corporation?

If your company is already incorporated somewhere other than the United States, Canada, Singapore or the Cayman Islands, in order to participate in YC you will need to create a parent company that is in one of those jurisdictions. The existing company will then become a subsidiary of the new United States, Canada, Singapore or Cayman parent company.  


Undoubtedly, the US has the biggest funding institution, with $63 billion in 2022 and positioning is synonymous with funding. So, asides from being a condition precedent, the need to attract investors and VC firms will drive StartUps to incorporate in the US and perhaps Delaware.


According to Forbes Advisor, the most famous reason Delaware has attracted the eye of corporations across the world is the lenient taxes imposed by the state. Corporations registered in Delaware that do not do business in the state do not pay corporate income tax. Delaware also does not have a sales tax, investment income taxes, inheritance taxes or personal property taxes. While companies do have to pay a franchise tax to register in Delaware, this can be pennies compared to the income tax other states would charge. Nationwide companies that do conduct business in Delaware can still skirt the in-state income tax by establishing subsidiary or shell companies that hold various intangible assets but do not directly run business operations.


Instead of a traditional trial system, corporate lawsuits in Delaware are resolved by the Court of Chancery, a court made up of judges who specialize in corporate law. Because of this, Delaware has well-developed and predictable legal precedents that may benefit corporations. While the average civil lawsuit may take a number of years to resolve, Delaware’s use of judges instead of juries and prioritization of corporate-related cases means similar cases can be decided more quickly.


As with registering a business in most states, companies must assign a registered agent who maintains a physical address to be the official address and to receive mail and collect paperwork. Unlike most states, however, in Delaware, the registered agent is the only name that must be disclosed in association with the company. Other officers and directors are not required to disclose their names, allowing an extra degree of anonymity. Because of this lack of reporting, officers, directors and shareholders are also not required to maintain residency in Delaware.

For Delaware Company Formation and how to form the Holding-Subsidiary structure between the Delaware Company and the Nigeria Startup, feel free to contact us.

Tolulope Oguntade 
Regville Associates