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Why Are the Majority of U.S. Companies Incorporated in Delaware?

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Over a million businesses—more than 50 percent of publicly traded companies in the U.S. and more than 60 percent of Fortune 500 companies—are incorporated in Delaware. But with a population of only 941,600 (as of October 2015), why do so many big companies, from Bank of America to Google to Coca-Cola, incorporate in Delaware?

Delaware’s courts, tax system, laws, and policies have made it an attractive state for businesses to incorporate in since at least the early 1900s [PDF]. Speaking to The New York Times, David Brunori, a George Washington University Law School professor and tax expert, explained that “Delaware is an outlier in the way it does business … what it offers is an opportunity to game the system and do it legally.”

First, the Delaware Court of Chancery (established in 1792) allows companies to resolve disputes quickly with a judge rather than a jury. Judges for the Court of Chancery specialize in corporate law, draw on hundreds of years of legal precedent, and hear only business-related cases.

Second, Delaware’s tax system gives businesses several ways to legally minimize their tax bills. Companies that are incorporated in Delaware but do business in other states don’t have to pay state corporate income tax to Delaware. Some groups accuse Delaware of being a tax haven because the “Delaware loophole” allows companies to declare certain types of revenue in Delaware rather than in the state where the business actually occurred. Delaware also doesn’t tax profits on royalty payments, trademarks, or copyrights.

Third, Delaware’s laws and policies make it easy for businesses to incorporate, avoid liability, and retain privacy. Delaware’s Department of State makes it convenient for businesses to fill out incorporation paperwork, which can be done in under an hour. Because they don’t have to give much personal identifying information, company officers who incorporate or set up business accounts in Delaware can also maintain privacy, ensure anonymity, and avoid personal liability.

Because Delaware has had a reputation for being friendly to businesses for such a long time, it makes sense logistically for businesses to incorporate in the state. Most corporate attorneys know Delaware’s business laws, and many IPO-minded investment banks prefer to work with companies that are incorporated in Delaware.

Not everyone loves Delaware’s stance on business, though. Because of its relatively lax regulations, the state attracts illegal businesses that can easily establish shell companies and launder money. Delaware requires very little documentation and identification information to set up a shell company, so it can be even easier to set up a business there than in an international tax haven like the Cayman Islands. Additionally, other states collect less tax revenue because so many businesses choose to incorporate in Delaware rather than nearby states such as Pennsylvania and New York.

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Why Are Mugshots Made Public Before a Suspect is Convicted by the Court?
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Jennifer Ellis:

Several reasons.

1. Mugshots can help find people when they have absconded, or warn people when someone is out and dangerous. So there is a good reason to share some mugshots.

2. Our legal system requires openness as per the federal constitution, and I imagine most if not all state constitutions. As such, this sort of information is not considered private and can be shared. Any effort to keep mugshots private would result in lawsuits by the press and lay people. This would be under the First and Sixth Amendments as well as the various Freedom of Information Acts. However, in 2016 a federal court ruled [PDF] that federal mugshots are no longer routinely available under the federal FOIA.

This is partially in recognition of the damage that mugshots can do online. In its opinion, the court noted that “[a] disclosed booking photo casts a long, damaging shadow over the depicted individual.” The court specifically mentions websites that put mugshots online, in its analysis. “In fact, mugshot websites collect and display booking photos from decades-old arrests: BustedMugshots and JustMugshots, to name a couple.” Some states have passed or are looking to pass laws to prevent release of mugshots prior to conviction. New Jersey is one example.

a) As the federal court recognizes, and as we all know, the reality is that if your picture in a mugshot is out there, regardless of whether you were convicted, it can have an unfortunate impact on your life. In the old days, this wasn’t too much of a problem because it really wasn’t easy to find mugshots. Now, with companies allegedly seeking to extort people into paying to get their images off the web, it has become a serious problem. Those companies may get in trouble if it can be proved that they are working in concert, getting paid to take the picture off one site and then putting it on another. But that is rare. In most cases, the picture is just public data to which there is no right of privacy under the law.

b) The underlying purpose of publicity is to avoid the government charging people and abusing the authority to do so. It was believed that the publicity would help protect people. And it does when you have a country that likes to hide what it is up to. But, it also can cause harm in a modern society like ours, where such things end up on the web and can cause permanent damage. Unfortunately, it is a bit of a catch-22. We have the right to know issues and free speech rights smack up against privacy rights and serious damage of reputation for people who have not been convicted of a crime. The law will no doubt continue to shake out over the next few years as it struggles to catch up with the technology.

This post originally appeared on Quora. Click here to view.

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What Happens When You Flush an Airplane Toilet?
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For millions of people, summer means an opportunity to hop on a plane and experience new and exciting sights, cultures, and food. It also means getting packed into a giant commercial aircraft and then wondering if you can make it to your next layover without submitting to the anxiety of using the onboard bathroom.

Roughly the size of an apartment pantry, these narrow facilities barely accommodate your outstretched knees; turbulence can make expelling waste a harrowing nightmare. Once you’ve successfully managed to complete the task and flush, what happens next?

Unlike our home toilets, planes can’t rely on water tanks to create passive suction to draw waste from the bowl. In addition to the expense of hauling hundreds of gallons of water, it’s impractical to leave standing water in an environment that shakes its contents like a snow globe. Originally, planes used an electronic pump system that moved waste along with a deodorizing liquid called Anotec. That method worked, but carrying the Anotec was undesirable for the same reasons as storing water: It raised fuel costs and added weight to the aircraft that could have been allocated for passengers. (Not surprisingly, airlines prefer to transport paying customers over blobs of poop.)

Beginning in the 1980s, planes used a pneumatic vacuum to suck liquids and solids down and away from the fixture. Once you hit the flush button, a valve at the bottom of the toilet opens, allowing the vacuum to siphon the contents out. (A nonstick coating similar to Teflon reduces the odds of any residue.) It travels to a storage tank near the back of the plane at high speeds, ready for ground crews to drain it once the airplane lands. The tank is then flushed out using a disinfectant.

If you’re also curious about timing your bathroom visit to avoid people waiting in line while you void, flight attendants say the best time to go is right after the captain turns off the seat belt sign and before drink service begins.

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