Why businesses organize in Delaware and how New Mexico compares

November 2, 2025

By Nadia Cabrera-Mazzeo, Esq.

I’ve had existing clients and prospective clients here in New Mexico ask me if they should register their business in Delaware because everyone knows Delaware is all the rage for business organization. There are very good reasons why so many businesses register in Delaware, but those reasons don’t really apply to small businesses in New Mexico. Small businesses in New Mexico should register in New Mexico, as explained below.

Why so many businesses organize in Delaware

Delaware has more registered businesses than any other state at more than 2 million. For context, New Mexico has about 15,000. Almost 68% of Fortune 500 are organized in Delaware.

One of the many interesting things about Delaware is that it is the “first” U.S. state! Being the first state to ratify the U.S. Constitution in 1787, Delaware hit the ground running in the business world by almost immediately establishing its famous Court of Chancery in 1792. The Court of Chancery is an entire court dedicated to corporate law and it’s one of the main attractions for businesses to register in Delaware today. By having an entire court dedicated to businesses, with over 200 years of activity deciding the outcomes of legal business disputes, cases can move pretty quickly and businesses have clear expectations about the effect of their own dealings and how the law applies to them.

By contrast, business disputes in other states are heard in the same, often backlogged, courts as all other cases. With every state having different laws, legal outcomes vary widely. Some states, like New Mexico, have relatively little law to begin with so courts often look to what other states are doing in similar situations and go from there.

You can see how for large companies that operate nationwide and beyond, a state with the most established legal framework for businesses that goes back centuries is a good fit for a corporate home.

How Delaware compares with New Mexico for businesses filings

Another major reason often touted for why Delaware is a great place to register a business is its easy and flexible procedures for business formation and maintenance. But this is where New Mexico actually comes out ahead. New Mexico has lower fees and fewer reporting requirements.

You read that right, some corporations in Delaware pay $200,000 in franchise taxes alone. Businesses pay Delaware handsomely for the privilege of registering there and the benefits of its Chancery Court. For small businesses that are unlikely to need the fancy business court, New Mexico makes more sense as a corporate home.

Other considerations for small NM businesses

Regardless of where a business is incorporated or organized, businesses have to register in the states where they do business—this process is called registering as a “foreign” (meaning out-of-state) entity. So even if you were to register your business in Delaware, you would still have to register your business in New Mexico as a foreign entity and pay the filing fees associated with that.

Further, in order to register your business in Delaware, you would need to have a registered agent with a physical presence in the state. You would also need to maintain a registered agent with a physical presence in New Mexico in order to do business in NM as a foreign entity. New Mexico businesses who want to register in Delaware will essentially pay double fees and costs.

Law office of Nadia Cabrera-Mazzeo, Esq.

Small business and contracts lawyer

Based in Taos, serving clients throughout New Mexico

505 427 2025

nadia@honestcontracts.com

The information on this website is not legal advice and does not create an attorney-client relationship. The rates and fees listed on this website may not be the most up to date.