Delaware is a popular state for business owners. Find out more information about the forms you’ll need to form a corporation in Delaware, including details about fees and taxes, how long the process takes, and more.
Ready to start your business?
Excellent
by Jane Haskins, Esq.
Jane has written hundreds of articles aimed at educating the public about the legal system, especially the legal aspe...
Updated on: November 28, 2023 · 5 min read
When you form a corporation, your personal assets are protected from liability for your business’s financial obligations. A corporation may also help to protect your personal assets if someone sues a corporate employee. Forming a corporation may also result in tax benefits.
Many large corporations choose to incorporate in Delaware because the state is known for having well-developed, business-friendly corporate laws. Small-business owners in other states who are considering incorporating in Delaware may want to weigh any potential advantages against the additional cost of being incorporated in one state while doing business in another.
A Delaware corporation exists as soon as you file its certificate of incorporation with the Secretary of State. To form a corporation, you must mail or fax a certificate of incorporation and a cover sheet to the Secretary of State’s office and pay a fee. The articles of incorporation must include the following:
A corporation can have different types of stock, called classes or series. These types of stocks can have different advantages, for example, one can offer voting rights while another may not. The corporation’s certificate of incorporation must meet the following requirements in regard to stock structure:
Ready to form a corporation? GET STARTED NOW
Before submitting your certificate of incorporation, you can determine if your proposed corporation name is available by conducting a search on the Secretary of State’s website. You may reserve a business name for 120 days by submitting an application online or in writing to the Secretary of State. Your corporation name must meet the following requirements:
Your corporation’s name must include one of these words: “association,” "company," "corporation," "club," "foundation," "fund," "incorporated," "institute," "society," "union," "syndicate" or "limited," or the abbreviation of one of these words.
Your corporation’s name must be distinguishable from the name of any corporation, limited liability company, partnership, limited partnership, or statutory trust on file or reserved with the Secretary of State unless the party currently using the name consents in writing.
An incorporator’s primary role is to file the certificate of incorporation. The incorporators’ names and addresses must be listed on the certificate. When specifying incorporators, you must adhere to the following requirements:
Your corporation must have at least one incorporator.
An incorporator may be a person, corporation, partnership, or association. The incorporator does not have to reside or be incorporated in Delaware.
If the certificate of incorporation does not name initial directors, the incorporators must hold an organizational meeting to elect directors. They may also approve initial bylaws and do whatever else is necessary to manage the business until the directors are chosen. Once directors are named, the incorporators have no further role.
Corporate directors determine corporate policies and strategies. They are also responsible for managing the business of the corporation, though they often delegate day-to-day management to the officers. When specifying directors, you must meet the following requirements:
A registered agent is a person or entity that a corporation designates to receive legal documents on behalf of the corporation. The registered agent is responsible for forwarding those documents to the corporation.
Every Delaware corporation must have a registered agent that has an actual street address in Delaware.
A registered agent may be an individual who resides in Delaware or a business entity that is authorized to do business in that state.
A corporation may act as its own registered agent if it is physically located in Delaware.
The Secretary of State’s website has a list of Delaware registered agents.
You can state your corporation’s purpose in general terms to allow flexibility in case the nature of your business changes over time. Under Delaware law, it is sufficient to state that “the purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.”
A corporation’s bylaws are its internal rules and operating procedures. They are not filed with the Secretary of State. Bylaws may include any provisions relating to the business and affairs of the corporation or the rights and powers of the corporation and its directors, officers, shareholders, and employees.
Your corporation bylaws must meet the following requirements:
The incorporators or directors must approve initial bylaws.
Bylaws cannot include anything that is inconsistent with the law or the certificate of incorporation.
The Delaware Secretary of State requires a fee when filing a certificate of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes and a franchise tax.
Ready to start a corporation in Delaware? Form a Delaware corporation online and select a registered agent through LegalZoom.
You may also like
How to Write a Will: A Comprehensive Guide to Will Writing
Writing a will is one of the most important things you can do for yourself and for your loved ones, and it can be done in just minutes. Are you ready to get started?
July 21, 2024 · 11min read
What Is a Power of Attorney (POA)? A Comprehensive Guide
A power of attorney can give trusted individuals the power to make decisions on your behalf—but only in certain situations.
August 29, 2024 · 20min read