The Delaware Advantage - Typical Special Purpose Companies:

Section 1902 (b) (8) of the Delaware Code provides and exemption from corporate income taxes for:

Corporations whose activities within the State are confined to maintenance and management of their intangible investments and the collection and distribution of the income from such investments or from tangible property physically located outside this State.

This provision can provide substantial relief from state and local taxation for organizations that properly set up and maintain a Delaware-based holding company for their revenue-producing intangible investments.

Examples of typical special purpose intangibles companies:

• Royalty companies that hold patents, trademarks and other intangibles, including double royalty structures
• Inter-company loan companies, with fixed term loans, or revolving credit agreements
• Investment companies that hold marketable securities ranging from short-term to long term, fixed income or equity portfolios
• Holdings in subsidiary companies and interest in partnerships, for subsequent sales