WILMINGTON — In a rare sight, the chief of Delaware’s top incorporation firm urged incoming local government officials and business leaders to rally together to protect the state’s most lucrative income source.
Before more than 1,000 business, government and nonprofit leaders,
CSC President and CEO
Rod Ward said it was more important now than ever for Delaware leaders across all sectors to be unified in protecting the state’s $2 billion corporate franchise tax.
In his keynote speech at the 188th annual
Delaware State Chamber of Commerce dinner, Ward paid tribute to Delaware’s 200-year-old history as an incorporation destination — but he also warned that the state was at a perilous time with threats from other states and beyond.
“For 125 years, CSC has worked alongside Delaware and we’ve done so with one goal in mind — to create an ecosystem where businesses can thrive, people can grow and communities can prosper,” Ward said. “More than 100 years ago, New Jersey was poised to become the top jurisdiction for corporations today. I would offer to you that the reason they squandered this golden opportunity was their collective failure to appreciate it and their lack of focus on protecting and maximizing that power.”
Since Delaware had first passed the general incorporation act of 1899, millions of businesses have signed papers that place their legal address in the First State while paying franchise fees and other taxes to take advantage of the state’s complex corporate laws and the Court of Chancery that handles a high volume of complicated cases in a quick succession.
The state’s bedrock of corporate law is now two centuries old and is reviewed and revised every year through recommendations by the Delaware State Bar Association and by state law.
It’s also proven to be incredibly lucrative for the state as it has collected $2 billion in corporate franchise revenue in 2023. That funds the state’s annual operating expenses — or more than a third of the
current proposed Fiscal Year 2026 budget. To date, 68% of the Fortune 500 companies and nearly 80% of initial public offerings were registered in 2023.
Ward, who leads the state’s pre-eminent professional services firm that guides companies based in 140 countries and states through the incorporation process, sees things a little differently.
“As remarkable as those milestones are, they remind us that we cannot take our collective success for granted. Consider that in 2021, Delaware saw more than 336,000 new business formations. But by two years later, that number had dropped under 300,000,” he said.
As CEO of CSC for 14 years, Ward has watched market shifts in countries like Ireland, Luxembourg, Jersey and others, gauging Delaware’s competitiveness on an international scale. Luxembourg offers protections that allow funds to seamlessly move into markets across Europe, for example, while the Cayman Islands has recently undergone a transformation from tax haven to a leading jurisdiction for private investment.
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CSC CEO and President Rod Ward talked about recent developments internationally and in the United States to attract companies to file articles of incorporation. | DBT PHOTO BY KATIE TABELING[/caption]
Delaware is not immune to these changing tides and Ward pointed out that Delaware’s status as the leader of corporate law places the First State in “the crosshairs of domestic and international scrutiny” with high expectations.
The spotlight has never been brighter on Delaware, even with current challenges on the home front spurred by recent moves in Texas, Nevada and Wyoming to form their own business courts. In the last year, Elon Musk, founder of Tesla and X, formerly known as Twitter, has taken to the media to sharply rebuke Delaware’s Chancery Court for how it handled a dispute on his $56 billion pay package. Musk had insinuated that the chancellors on the bench are activist judges, prompting the state’s legal community to strongly
rebut those claims.
“The single misstep implementing regulations or responding to global standards can tarnish Delaware's exhibition as a global leader with long standing repercussions,” Ward said. “Regulatory pressures are inevitable in a world demanding greater accountability and transparency, we must be unified in our efforts to protect and enhance our reputation in this dynamic environment, closer to home, closer to home.”
For Ward, the incorporation status of the First State is not only business; it’s personal. The Corporation Service Company, now known as CSC, was founded by his great-grandfather in the same year the state’s incorporation act became law. Ward’s father,
Rod Ward Jr., also served on the company’s board.
In an emotional moment, Ward told the crowd his father, a prolific corporate litigator, was looking down on them.
“I can hear him say, ‘don’t mess this up.’ He’s especially looking at me and, Gov.-elect Meyer, he’s looking at you,” he said.
Ward also addressed the Delaware skeptics, including a thinly veiled reference to Musk, citing his father who had a predilection for Latin mottos.
“I offer you this: ‘Vis unita fortior.’ Strength united is stronger. Let’s rise to this occasion together, ensuring when our efforts are complete, we can look forward to knowing we have passed on to future Delawareans, a franchise that remains second to none,” he said.