Why do companies incorporate in Delaware?

Many companies choose to incorporate in Delaware because of its favorable tax rates for companies headquartered in other states, as well as flexible corporate laws and other incentives for businesses. Fifty-eight percent of all Fortune 500 companies and 68 percent of the biggest companies in America are incorporated in Delaware.

Delaware has become recognized nationally as a corporate haven in the early 20th century. Its success can be attributed to enacting a series of laws that made it very easy to incorporate a business in a time when state legislatures typically had to approve the request. As of 2014, Delaware ranks as the 11th best state in which to do business, according to Forbes.