Delaware is a small state on the Eastern Coast of the United States, bordered by Atlantic Ocean to the east and Delaware Bay to the west. With a surface area of 5,068 km2 (width 13-48 km, height 161 km), it consists of three counties: New Castle, Kent, and Sussex County.
The state’s capital is Dover, but the largest city is Wilmington, nowadays practically a suburb of the nearby Philadelphia. There are 800,000 inhabitants in Delaware. Neighboring states are Maryland, Pennsylvania and New Jersey. The drive from Wilmington to Washington, D.C. or New York is a matter of a couple of hours.
Though Delaware is known by the name First State (as it was the first of the initial 13 colonies to ratify the United States Constitution), it is the 49th if measured by surface area; only Rhode Island is smaller. In that respect, the sole reason why Delaware is noteworthy is the fact that due to the state’s business-friendly legislation and taxation it is home to the majority of big businesses in the U.S., with a significant portion of all financial transactions at some point passing through Delaware banks and institutions.
Europeans first settled in a Dutch trading post at “Zwaanendael” (present-day Lewes) in 1631. The area became New Sweden with a colony established by Swedes around Fort Christina (now Wilmington) in 1638. It was taken over by the Dutch colony of New Netherland in 1655. English control began in 1664.
Posession of the “three counties” of Delaware was disputed between the colonies of New York and Maryland. They were eventually appended to William Penn’s grant in 1682. Delaware Colony was separated from Pennsylvania Colony in 1704; however, it did not have its own governor.
The area now known as “Delaware” had no official name before 1776; it was administered by the proprietors of Pennsylvania Colony as part of their jurisdiction, even though it had a separate local assembly and courts.
During the American Revolution the colony declared independence from British rule and the three counties became “The Delaware State”. The state was named after the Delaware River, which in turn was named for Thomas West, the Lord de la Warr, an early governor of Virginia Colony.
Delaware is known by the name First State as it was the first of the initial 13 colonies to ratify the United States Constitution on December 7, 1787.
In 1792 Delaware adopted its first constitution, declaring itself to be the “State of Delaware.” Its first governors went by the title of “President of the Delaware State”.
During the American Civil War almost a century later, Delaware was a slave state that remained in the Union. Two months before the end of the Civil War, however, Delaware voted on February 18, 1865 to reject the 13th Amendment to the U.S. Constitution and so voted unsuccessfully to continue slavery beyond the Civil War. Delaware finally ratified the amendment on February 12, 1901 — 40 years after President Lincoln’s Emancipation Proclamation.
Colonial blue and buff are Delaware’s official state colors. The sheaf of wheat, ear of corn, and the ox on the state seal symbolize the farming activities of early Delaware. The official state song is “Our Delaware”, with words by George Hynson and music by William Brown.
Delaware’s fourth and current constitution was adopted in 1897 (though it has been amended since then) and provides for executive, judicial and legislative bodies. The legislative body consists of a House of Representatives with 41 members and a Senate with 21 members. The executive branch is headed by the Governor of Delaware and the judicial branch provides for a hierarchy of courts with the state Supreme Court being the highest.
Delaware is not dominated by either major American political party but it now tends to vote Democratic in presidential elections, having done so in the last four contests. The Philadelphia suburbs of New Castle county vote Democratic, while the Dover and Sussex counties are mostly Republican.
Because of the large number of major corporations chartered in Delaware, the courts in the state are generally regarded as more experienced in the application of corporate law than the courts of other U.S. states.
Disputes over the internal affairs of Delaware corporations are frequently filed in the Court of Chancery, which is one of the last separate courts of equity (as opposed to law) in any U.S. state, and renowned world-wide as a pre-eminent forum for corporate matters.
Because the Court of Chancery is a court of equity, there are no juries, and its cases are decided by the “judges” of the Court: one Chancellor and four Vice-Chancellors.
As the Court of Chancery cannot award money damages, Delaware’s Superior Court, the trial court of general jurisdiction, also hears and considers a large number of cases between corporations involving claims for money.
Due to the number of corporations which incorporate in the state, the Federal Bankruptcy Court in Delaware handles many high-profile insolvencies, and the United States district court for the District of Delaware considers many patent disputes between Delaware corporations.
Delaware may be a small state but it is prosperous: the gross state product of Delaware in 2003 was $49 billion, with the per capita personal income being $34,199, which ranks as 9th in the United States.
The state’s prosperity is largely due to its business-friendly legislation and taxation, which has made it well-known as a corporate haven. Most major Fortune 500 corporations are chartered in Delaware because the state charges no corporate income tax on companies not operating within the state — although all Delaware corporations must pay an annual corporate franchise tax.
Delaware’s laws, particularly the Delaware General Corporation Law, are designed to allow maximum flexibility to corporate operations. Under state law, a corporation need not have a physical presence in Delaware, save for a registered agent to accept service of legal process and pay the corporation’s annual franchise taxes, and officers and directors do not have to reside in the state or be U.S. citizens or permanent residents.
Despite having their corporate headquarters in the Silicon Valley, many Californian companies are actually incorporated in the State of Delaware, providing them with better protection against hostile takeover. For example, Google was incorporated in California in 1998, but it reincorporated in Delaware before its IPO:
“We were incorporated in California in September 1998. In August 2003, we reincorporated in Delaware. Our principal executive offices are located at 1600 Amphitheatre Parkway, Mountain View, California.”
Delaware’s liberal taxation policy has proven eminently sensible for such a small state: merely the corporate Franchise Taxes, levied annually from its over 600.000 registered corporations, make up over 20% of the state’s income.
The following are all examples of companies which are incorporated in Delaware but in practice headquartered elsewhere in another state (except for DuPont, which actually does have physical headquarters in Wilmington):
Delaware is one of only five U.S. states that have no sales tax; the other four are Alaska, Montana, New Hampshire and Oregon.
As of 2004, there were an estimated 830,364 people living in Delaware.
The racial breakdown of the state is 72.5% White, 19.2% Black, 4.8% Hispanic, 2.1% Asian, 0.3% American Indian, 1.7% Mixed race.
The five largest ancestries in Delaware are: African American (19.2%), Irish (16.6%), German (14.3%), English (12.1%), Italian (9.3%).
The Philadelphia suburbs of northern Delaware, such as Wilmington, are heavily Irish, while southern Delawareans are largely of British ancestry. Delaware has the largest black population percentage-wise north of Maryland, and had the largest population of free blacks (17%) prior to the U.S. Civil War.
As of 2000, 90.5% of Delaware residents age 5 and older spoke English at home and 4.7% spoke Spanish. French is the third-most-spoken language at 0.7%, followed by Chinese at 0.5% and German at 0.5%.
Religious affiliations in Delware are 79% Christian (mostly Protestants, with some Catholics thrown in for good measure), 19% non-religious, and 2% other religions.