2019 Annual Report

Delaware’s business entity franchise saw another year of healthy growth in 2019. The total number of LLCs registered in the First State crossed the one million mark and we continue to be the domicile of choice for members of the Fortune 500 and newly public companies, with approximately 89% of all U.S. initial public offerings last year.

Statutory changes adopted by the Delaware General Assembly in 2019 consisted of relatively minor revisions to promote consistency and provide additional clarity with respect to business entity division. In keeping with longstanding tradition, the revisions were recommended by a panel of experts in Delaware corporate law and jurisprudence, and acted on by the Legislature in a process largely free of political influence.

The Secretary of State’s office also continued efforts to protect the integrity of the franchise and discourage the activities of bad actors through regulatory action. Newly promulgated rules pertaining to the naming of entities will provide a greater measure of accountability and review at the time of company formation. On the revenue side, we tapped our partners in the business services industry to help us better engage with delinquent entities and recover funds owed.

In Washington, we continue to work with members of Congress to craft a nationwide beneficial ownership policy that will provide law enforcement with access to entity ownership information for the purpose of combating illicit financial activity. It remains our belief that a federal mechanism for the collection of this information is superior to a state-by-state structure that would inevitably prove inconsistent.

Although 2020 is proving to be a year of uncertainty across all sectors of business and the economy, I am proud to say that the Division of Corporations has maintained an outstanding level of service during the public health crisis. The strength of our franchise is, in part, dependent upon the excellent customer service of our Division of Corporations team, and I commend them for upholding the highest standards in the most challenging of circumstances.