Partnership with Delaware Libraries Makes Corporate
Filings Faster and More Accessible

Wilmington, DE – Joined by Delaware entrepreneurs and small business owners, Gov. Jack Markell today launched a new web portal to deliver online business formation and related services in support of in-state businesses.

Global Delaware, the Division of Corporations, the Division of Libraries, and public libraries across the state have teamed up with two Delaware-licensed registered agents, CT Corporation and IncNow, to make business registration available directly from the state for the first time.

Until now, Delawareans looking to form an entity directly with the state had to file through the mail or in-person at the Division of Corporations offices in Wilmington or Dover. With this new service, residents can complete the task online or at a Delaware public library with help from a librarian. This new option is quick, safe and cost-effective.

“The collaborative effort puts a terrific resource in the hands of our residents, and is exactly the direction we want to be headed in: Supporting local companies looking to create business structures that will enable expanded growth and success,” said Governor Markell.

Registration services on the Division of Libraries’ online platform have been customized for Delaware businesses, with the backing of the Division of Corporations as well as Delaware’s extensive public library network. The registration service will reside on the Delaware Libraries Entrepreneurship Community page, with other online tools and resources designed to support budding businesses.

“More than 1.2 million legal entities are incorporated in Delaware from around the world. I’m pleased that CT Corporation and IncNow took up the challenge of creating a product specifically targeted to the needs of small Delaware-based businesses,” explained Rick Geisenberger, director of the Division of Corporations. “By partnering with trusted agents and public libraries, we can further ensure that local entrepreneurs have convenient access to services they need when it comes time to start a business.”

“This partnership with Global Delaware is a great opportunity for us to add expert tools that support microbusinesses here in the State,” said State Librarian Dr. Annie Norman. “Delaware Libraries serve as a hub for connecting Delawareans with the information and resources they need to help them move forward with their plans to launch a new business.”

Librarians across the state received training on the new business registration platform in order to assist Delawareans who want to use the service. In addition, the new online service includes dedicated helplines staffed by professionals from IncNow and CT Corporation who will help walk users through the process and answer questions.

“State agencies continue to work together to help Delaware businesses become more informed, supported and competitive,” said Andrea Tinianow, director of Global Delaware. “We hope the local business community will take full advantage of this newest resource, and to let us know how else we can help.”

Enacts Governor’s State of the State proposal to improve access to capital

Wilmington, DE – Today at the coworking space The Mill in downtown Wilmington Governor Markell signed legislation that will give entrepreneurs across Delaware increased opportunities to access capital to grow their businesses.

Sponsored by Representative Bryon Short (D-Highland Woods) and Senator Brian Bushweller (D-Dover), HB 327 permits the use of online crowdfunding platforms and allows Delaware residents to be investors in Delaware start-ups and small businesses, expanding the potential pool of investment capital while also giving Delawareans the chance to be early stage investors in these ventures. The measure enjoyed broad bi-partisan support and was passed unanimously in both houses of the General Assembly last month.

“At a time when small business and entrepreneurs have a bigger stake in our state’s economic future we want to make sure that those with ideas to start new businesses and expand their employment have the opportunity to succeed right here in Delaware,” Governor Markell said. “By demonstrating support across state government for Delaware’s growing entrepreneurial sector, we’re taking another step to build on Delaware’s record-setting job growth in the years to come.”

The Governor highlighted the crowdfunding initiative during his State of the State address earlier this year and it follows action by the Congress, through leadership from Congressman John Carney, which gives states the flexibility to permit citizens to more easily invest in startups. Around the world, crowdfunding allows companies to raise billions of dollars, and this year for the first time this amount of investment is expected to exceed funding provided through traditional sources like venture capital.

“We need to make sure our laws keep pace with technology so that our small businesses have access to new methods of raising much-needed capital,” said Representative Bryon Short, the bill’s prime sponsor in the House. “Delawareans have a strong sense of pride in locally owned and operated businesses. This law takes steps to help new companies by enabling Delaware residents to invest and participate in the success of homegrown Delaware start-ups.”

Through the legislation the Governor signed into law today, Delaware-based companies will be permitted to offer equity stakes to Delaware residents or other Delaware businesses over internet platforms. (Due to Federal law, Delaware cannot permit investment from residents of other states.) While the new statute requires certain disclosures to ensure the validity of the offerings, it does not require issuers to make detailed financial disclosures that might be prohibitively costly for many small businesses and start-ups. It permits a business to raise up to $1 million over a 12-month period and an individual to invest up to $5,000 in any one offering.

“We must strike the right balance between protecting the public from fraudulent activity and making sure our small businesses can access investment capital, and this bill accomplishes that,” said Senator Bushweller, the bill’s prime sponsor in the Senate. “I look forward to working with my colleagues to pass this into law.”

“This law is a recognition of the changing landscape of how businesses are conceived and financed in the 21st Century,” said Representative Lyndon Yearick, R-Dover South. “There are many examples of businesses that got their start through online crowdfunding. It’s time we allow Delaware entrepreneurs to tap into a resource that could help them turn a dream into a viable enterprise.”

“Any advantage we can give our home-grown companies is a benefit in the new economy,” said Senator Greg Lavelle. “It’s important to give Delaware companies access to Delaware investors, and any time we can do that in a safe and responsible way, we should.”

The Delaware Attorney General’s Investor Protection Unit will maintain oversight of sale registration and equity offerings.

“It has never been more important to maintain a nurturing and supportive economic environment in our state that will encourage growth for small businesses,” said Congressman Carney. “I am proud that I was able to join a bipartisan effort in Congress to make it easier for small businesses to access needed capital through new, innovative platforms, which has paved the way for our state to take advantage of this opportunity.”

“This bill represents an economic development opportunity for small businesses in Delaware and encourages Delaware citizens to engage more directly with businesses they want to support,” said Rich Heffron, Delaware State Chamber of Commerce President. “This is exactly what we need to encourage growth and to expand Delaware’s entrepreneurial culture.”

New law supports research and development by small businesses

Wilmington, DE – Further cementing Delaware’s standing as one of the top two states in the “New Economy,” Governor Markell today signed legislation increasing opportunities for the state’s entrepreneurs to innovate and grow. The Governor was joined by business leaders and a bipartisan group of legislators at Delaware BioScience Association’s headquarters at Delaware Technology Park to sign House Bill 318, which doubles the state research and development tax credit for small businesses.

“We are encouraged that Delaware’s job growth has outpaced the nation’s for 17 months running, but we know we have more work to do and that the states and countries producing the research that leads to more innovation will have a clear economic advantage,” said Markell.

“State R&D tax credits have been proven to encourage additional research, attract companies from other states, and boost the high-tech sector. Yet only about two percent of our credits go to small companies and start-ups. That needs to change, and that’s what this law is all about.  By encouraging research and development at all of our companies, we will incentivize innovation and growth in emerging industries that are vital to our economic future.”

The new law targets startups and small companies by directing additional support to businesses with less than $20 million in receipts. These entities would be eligible for a research and development tax credit of up to 100 percent of the corresponding federal credit, while large companies would continue to qualify for up to 50 percent.

Expanding the R&D tax credit for startups is only the latest in a series of efforts promoting innovation – an important theme from Markell’s State of the State address when he said, “Our ability to put Delawareans to work depends in part on whether we build on our legacy of innovation.” The Fiscal Year 2015 budget he signed at the beginning of the month includes $5 million for his proposals to support a Federal Research and Development Matching Grant Program and to fund the Delaware Cyber Initiative, which will help grow a key industry that has hundreds of unfilled jobs in the state.

HB 318, sponsored by Representative Bryon Short (D-Brandywine Hundred) and Senator Robert Venables (D-Laurel) with Republican co-sponsors in both chambers, will not cost the state additional revenue because the total amount of state funding for the tax credit would remain at $5 million.

“With the passage and signing of this bill we take another step in establishing Delaware as the best state to start and grow a business,” said Rep. Short. “By modernizing the R&D tax credit to better support the growth of small businesses, Delaware will be enhancing its competitiveness with other states and increasing the opportunity for job growth.”

“This increase in the research and development tax credit has the potential to create high quality jobs and to help Delaware small businesses, both of which the state needs badly,” said Sen. Venables. “It should help to improve the business climate both for existing businesses and as a way of attracting new ones.”

Previously, every business that conducted research and development in Delaware had calculated its credit in the same manner, whether the firm was a startup or a multinational. A company was given a share of the $5 million allocated for the tax credit – up to 50 percent of the federal tax credit they received – depending on the number of companies that applied in a given year. HB 318 ensures that small companies receive a larger share.

Studies have demonstrated the effectiveness of state tax credits for research and development, including in California and Illinois, where the policy has encouraged additional R&D activities, attracted companies from other states, and boosted the high-tech sector.

Among the attendees at today’s ceremony was Fred Kielhorn, CEO of DeNovix, a small instrumentation business in Wilmington that took advantage of the tax credit last year in its efforts to design, manufacture and sell laboratory equipment for today’s evolving life science technologies.

“This bill is extremely helpful for DeNovix,” Kielhorn said. “In these early stages cash is tight so every little bit helps. In part due to the state’s research and development tax credit, we were able to bring in the necessary resources early to enable us to quickly design, test and bring to market our first product, the DS-11 Spectrophotometer. I applaud Governor Markell for his business-friendly approach.”

In June, the Information Technology and Innovation Foundation (ITIF) recognized Delaware as the second best state in the New Economy, which is “marked by globalization, technological innovation and entrepreneurial development.” ITIF noted Delaware’s success in “high-wage traded services, foreign direct investment, and industry investment in R&D.”