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article Merit Exchange LLC forms, and joins New Castle County Chamber of Commerce

By Alex Zorach, July 9th, 2009

We are pleased to announce that on Friday, June 19th, Merit Exchange LLC was formed as a limited liability company in the state of Delaware, to be the entity that manages Merit Exchange. Shortly after this, on June 30th, Merit Exchange LLC joined the New Castle County Chamber of Commerce.

Why did you choose an LLC structure?

The LLC structure limits liability like a corporation, but has simpler recordkeeping requirements. It is a flexible structure that can take many forms and be adapted to many purposes. Organizing Merit Exchange as an LLC is a starting point and is not set in stone in the long run. Merit Exchange may some day become a non-profit organization, or perhaps it will end up taking some other form that has not yet been invented.

Did you choose Delaware because of its laws that favor corporations?

No. Our main operations are located in Newark, Delaware and most of our events and activity so far have been in Delaware. As of the date of formation, we had the largest number of members in Delaware of any state.

Some of the laws of Delaware are contrary to the mission of Merit Exchange. Merit Exchange's mission is to bring prosperity to all people, not necessarily to corporations. We are thus committed to help corporations only to the extent to which they help people. Delaware is widely seen as a corporate haven, especially for large corporations. Delaware law has recently been criticized as providing a tax shelter and tax loopholes for corporations1, and for continuing the trend that New Jersey started in enabling monopolies and anticompetitive practices2. The implications of such issues are far-reaching and affect things as tangible as land use and the food we eat. For example, a Delaware corporation recently created an uproar in connection to corporate farming practices in Nebraska3.

We hope to set an example of transparency and sustainability as an organization, going above and beyond what is required of us by law, in terms of providing information about how we are structured and run, where we derive our income from, and how we spend money, and in terms of using our resources to empower people and communities. Hopefully, through both example and through creating new incentives, we can encourage other businesses and organizations to work towards these same goals.

New Castle County Chamber of Commerce:

We joined the New Castle County Chamber of Commerce (NCCCC) for a variety of reasons. Local chambers of commerce, like Merit Exchange, are communities oriented towards connecting people and businesses with each other and encouraging productive economic activity. We hope through joining NCCCC that we can work closely with a variety of businesses and organizations in the local community in New Castle County and find ways to help people, businesses, and the community as a whole work more effectively.

References:

1. Lynnley Browning, "Critics Call Delaware a Tax Haven", New York Times, May 29th, 2009.

2. Charles M. Yablon, "The historical race competition for corporate charters and the rise and decline of New Jersey: 1880-1910.", The Journal of Corporation Law, Jan. 1st, 2007.

3. "The Future Is Nowó A Delaware Corporation pays $52 million for Nebraska Land", Center for Rural Affairs Newsletter, Lyons, NE 98038.

Cite this article:

Zorach, Alexander C. "Merit Exchange LLC forms, and joins New Castle County Chamber of Commerce," Merit Exchange Newsletter, Vol. 2, No. 3 (2009). http://meritexchange.com/article.php?article_id=15

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