More than half of all listed companies in the US and two-thirds of Fortune 500 companies are based in Delaware as their business-friendly legislation and well-established corporate legal priorities.
A state that does not have a sales tax receives almost a third of its tax revenue from the franchise taxes on more than 1 Million entities, which makes up to $1.3 Billion out of its total $4.2 Billion repositories. Inclusion as a most attractive state is viewed as a money generator and a competitive advantage over other states.
To this end, Delaware intends in October to launch a proof-of-concept of a blockchain-based file system that enables companies to use intelligent contract technology to automatically maintain inventory and collateral assets and stocks in real time. And If it happens in such way, lenders and debtors will have a more efficient and accurate record for doing business and complying with national and federal regulations.
“There are so many things that can potentially increase the value, and we just want to get a little immersed and understand how it really will work in a real demonstration, and then take steps forward,” said Delaware’s deputy secretary of state, Chris Knight.
The ledger will deal with the registration of state-owned companies but particularly focusing on business life-cycle management, according to Mark Fisk, the leader of the public service of IBM for the public service. Registered business agents and law firms have regular contacts with government officials to comply with the Uniform Commercial Code (UCC), which requires companies to pre-register all assets in one state. Pre-registration not only indicates who will have the first claims for these assets in the event of bankruptcy but also allows the lender to know what the company has presented as collateral for the loan.
Today UCC records are performed manually. A private or authorized blockchain ledger will allow companies to use intellectual contracts, a business automation tool that works against predefined business regulation.
Delaware recently awarded IBM a contract worth $738,000 to develop an electronic distributed ledger that will be based on the blockchain framework of Hyperledger Fabric.