A new Blockchain network lets firms in Delaware automate their business processes and allows investors to track stocks in real time.

About two-thirds of Fortune 500 firms are incorporated in Delaware due to its business-friendly laws and corporate legal precedence. Delaware doesn’t have any sales tax, and it’s getting around one-third of its revenue from franchise taxes, accounting for $1.3 billion.

In October, Delaware plans to launch a ‘proof-of-concept’ for a blockchain-based filing system that will allow corporations to track stocks and other assets in real time by using smart contract technology. By doing this, lenders and borrowers will have a more accurate and efficient record with which to meet state regulation and transact business.

Chris Knight, Delaware’s deputy secretary of state says in an interview: “There are so many things that could potentially add value and we just want to dive into it a bit deeper and get a better understanding of how it would actually work in a real demo and then potentially take steps forward.”

The Blockchain will be based on the Hyperledger Fabrik framework and will be designed by IBM. Mark Fisk, public service blockchain leader for IBM says that the ledger will be used for business lifecycle management, but also for registering the business with the state. The Uniform commercial code (UCC) requires companies to pre-register all assets with a state, and this enables a lender to know what kind of collateral a particular business has against a loan. The UCC filings today are managed manually and the blockchain with its smart contracts would act as a business automation tool.

When a public company incorporates, the number of shares must be declared. New startups and young companies find it hard to track the number of shares as well as their value.

Chris Knight says:”On a daily basis, one thing we’ve noticed across many organizations consistently is the problem over issuing shares. There are often issues determining their value because of mismanagement of shares or organizations not truly understanding where things stand.”

By providing companies with an application that will help them to easily manage this process by running it through the department of state to ensure that only certified and authorized shares are the numbers they’re working from has the potential to provide a benefit for corporations. This also ensures accurate shareholder ownership for voting purposes and also distribution payments.

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