Everything You Need to Know About Delaware Corporations:
Delaware Incorporation Options
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How to Incorporate in Delaware
To start a corporation in Delaware, you’ll need to do three things: appoint a registered agent, choose a name for your business, and file Certificate of Incorporation with the Delaware Division of Corporations. You can file this document online or by mail. The certificate costs a minimum of $89 to file. Once filed with the state, this document formally creates your Delaware corporation.
Per DE Code § 132, every Delaware corporation must appoint and maintain a registered agent. You don’t need to hire a registered agent, but if you do, make sure your registered agent will list their address on your certificate wherever possible to ensure maximum privacy.
If you’re starting a new business, you probably already know what you want to name your corporation. But you’ll need to know if your preferred name is available. To find out, visit https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx and search until you find the perfect name for your corporation.
Once you know who your registered agent will be and what your corporation name is, you’re ready to file your Delaware Certificate of Incorporation. Follow along with our filing instructions below:
Filing the Delaware Certificate of Incorporation
Learn more about each Certificate of Incorporation requirement below. Note that the information you provide becomes part of the public record—permanently.
Better yet, skip the form entirely and hire us to incorporate your Delaware business. We provide a free business address to list whenever possible throughout the filing to better keep your personal address private.
1. Certification Memo
If you submit by mail, Delaware recommends that you include a cover page, specifically their “Certification Sheet.” On this sheet, you can indicate the type of service requested (are you expediting?), as well as your desired return service and relevant contact information.
2. Business Name
Your name must include the word “Association,” “Company,” “Corporation,” “Club,” “Foundation,” “Fund,” “Incorporated,” “Institute,” “Society,” “Union,” “Syndicate,” or “Limited,” or an abbreviation. Tip: While “Syndicate” has a nice ring to it, most businesses go with something short and sweet like “Corp.” or “Inc.”
3. Registered Office and Agent
List the street address and name of your Delaware registered agent—this information will become part of the state’s permanent record. Your agent can be an individual Delaware resident (like you or another person associated with your corporation) or it can be a business that provides registered agent service (like Northwest). Either way, the agent needs to be available during regular business hours at the address listed to accept legal notices on your business’s behalf. Hire Northwest, and we’ll put our information here.
While a purpose statement is required, Delaware has already provided a general purpose for you on the state form.
5. Authorized Shares and Par Value
List how many shares of stock you’re creating and their par value. Par value is the face value of your stock (the amount printed on stocks and bonds) and is typically the minimum price at which stocks can be traded. Keep in mind that the par value (or lack thereof) that you list can affect your filing fee and the amount of franchise tax your Delaware corporation is required to pay.
Your incorporator is the person who submits your Delaware Certificate of Incorporation. A name and mailing address are required. Hire Northwest, and we’ll be your incorporator.
7. Execution Block
Execution block might sound scary, but it’s just Delaware’s way of indicating that a signature from your incorporator is required.
Why Have a Registered Agent Form Your Delaware Corporation?
Professionals in Delaware hire registered agent services like Northwest Registered Agent for incorporation—but why?
Standard filing companies don’t have employees or offices in every state. But as a national registered agent, it’s a requirement for us, which is a benefit for our clients. We own our own building in Dover, DE. We’re on a first name basis with the people who work in the Division of Corporations. We know all the fastest filing methods, which translates to fast, professional service—without extra fees.
As your registered agent, we list our Dover registered office address on your corporation’s formation documents. Why? If you’re starting a business from your apartment in Wilmington, do you really want your apartment address as your business address? (Hint: the answer is no.) We’ll list our address, so you don’t have to list yours. Plus, we never sell your data. We don’t list your personal information on filings if we don’t have to. It’s all standard and part of our commitment to Privacy by Default®.
Free Mail Forwarding and Business Address
We already accept your legal mail—so why not take it a step further? In every state, we include limited digital mail forwarding for your regular mail too (10 pieces of regular mail a year; $15 a doc after that). Plus, you can list our address as your business address. That means you can have all business mail routed through our office. With both mail forwarding and a business address included, you get a level of security unmatched in the formation industry.
We know the in’s and out’s of each state—and we use this knowledge to help you when you need it most. Our team of Corporate Guides® has over 200 local business experts. You can call or email us for answers to all your questions about your corporation in Delaware. Our Corporate Guides are dedicated solely to helping you with your business—not selling you services or meeting quotas.
What Do I Do After My Delaware Corporation Is Formed?
After your Delaware Certificate of Incorporation is approved, you still have a few more important steps to take, including getting an EIN, drafting bylaws, holding your first meeting, opening a bank account, and learning about state reporting and tax requirements.
Get an EIN
Your federal employer identification number (commonly known as an EIN or FEIN) is similar to a social security number for your business. The IRS assigns these numbers and uses them to easily identify individual corporations on tax filings, including federal corporate income tax returns.
Why does my Delaware corporation need an EIN?
The IRS requires corporations to get an EIN for their federal tax filings. You may also be asked for your EIN when opening a bank account, securing a loan, or applying for local business permits and licenses.
How do I get an EIN for my corporation?
You can get an EIN directly from the IRS. The application is free, and most businesses can apply online. However, if you don’t have a social security number, you’ll need to submit a paper application form. Can’t bear to fill out yet another application? Hire Northwest to get your EIN for you. Just add on EIN service during checkout when you sign up for our incorporation service. Or choose our VIP service—an EIN is included.
Write Corporate Bylaws
Bylaws are the internal rules you set for your business. They put into writing how decisions will be made and who gets to make those decisions. All the major organizational processes and procedures for your corporation will go in your bylaws.
Do I need bylaws for my Delaware corporation?
DE Code § 109 says that bylaws may be adopted, but the law doesn’t say that they must be. But bylaws aren’t any less important simply because you can legally avoid them. They’re an extremely valuable internal document that you should keep with your other corporate records, such as meeting minutes and resolutions.
What should bylaws include?
Corporate bylaws cover basic policies and procedures for issues such as company finances and management. Bylaws should cover a range of topics, answering key questions like those below:
Meetings: When and where will meetings for shareholders and directors be held? How many attendees are required to transact business? What are the procedures for voting or proxy voting? How do you call a special meeting? What actions can be taken without a meeting?
Stock: How are stock certificates issued and transferred? How is voting affected by issues such as corporate stock owners or fractional shares?
Directors and officers: How many directors must there be? Which officer positions are required? What powers do they have? How do you fill a vacancy or remove a director or officer?
Finances: What are the procedures for retaining profits, issuing dividends, and paying bills? Who can withdraw money from the corporate bank account or sign checks?
Records: Where is the corporate book to be kept? What information will be maintained? How are requests for review or access honored? Can records or copies be kept or distributed digitally?
Amendments and emergencies: Who can amend bylaws and how? Can emergency bylaws be adopted in the case of disaster?
Delaware bylaws can make other provisions as well, assuming additions are in accordance with state law. But, some things are off limits. For example, DE Code § 109 states that, in regard to internal corporate claims, the bylaws may not impose liability on a stockholder for attorney fees, corporation expenses, or expenses of any other party.
How do I write bylaws?
Creating bylaws can be overwhelming—where do you start? Northwest can help. We give you free corporate bylaws when you hire us to form your Delaware corporation. We know what kinds of topics and questions corporations need to address, and we’ve spent years refining and improving our forms. We offer many other free corporate forms as well, including templates for resolutions and meeting minutes.
Hold an Organizational Meeting
An organizational meeting is the first official meeting of the corporation after the business is legally formed with the state. At this meeting, bylaws are adopted, officers are appointed, and any other initial business is conducted. The first meeting minutes should also be recorded and added to your corporate record book.
Are there any special rules for Delaware organizational meetings?
You’re required to give a minimum of two days notice before holding the meeting. Attendees can, however, waive their required notice. The meeting doesn’t have to be held in Delaware.
Open a Corporate Bank Account
Businesses that mix personal and business finances together risk losing their liability protections, so your corporation will need its own bank account. In addition, a corporate bank account is essential for easily accepting payments, paying bills and holding funds.
How do I open a bank account for my Delaware corporation?
To open a corporate bank account in Delaware, you’ll need to bring the following with you to the bank:
A copy of the Delaware corporation’s Certificate of Incorporation
The corporation’s bylaws
The corporation’s EIN
If your bylaws don’t specifically assign the power to open a bank account, you may also want to bring a corporate resolution to open a bank account. The resolution would state that the person going to the bank is authorized by the business to open the account in the name of the corporation. At Northwest, we provide free corporate bank resolutions, along with many other free corporate forms, to help you get started fast.
File Delaware Reports & Taxes
In Delaware, corporations file an annual report each year, along with a state franchise tax. In addition, the state has a corporate net income tax and a gross receipts tax.
What is the Delaware Annual Report and Franchise Tax?
The Delaware Annual Report and Franchise Tax is a combined filing you must submit each year. The annual report portion is fairly straightforward. You update information on directors, officers, and registered agent name and address.
The franchise tax portion is a bit more difficult, as you have to actually figure out how much tax you owe. The state offers two methods for calculating your total franchise tax. You’ll pay a minimum tax of $175 if you use the “Authorized Shares Method” or $400 if you use the “Assumed Par Value Capital Method.” The maximum tax is $200,000 for most corporations. Don’t panic though—if you have fewer than 5,000 authorized shares (like most small corporations), you’ll typically pay just the $175 minimum.
How much is the Delaware Annual Report and Franchise Tax?
At least $225. The annual report has a flat fee of $50, but you’ll also need to pay however much franchise tax is owed (minimum $175).
When is the Delaware Annual Report and Franchise Tax due?
The filing is due March 1. Fail to file on time, and you’ll be hit with a $200 late fee plus 1.5% interest each month no report and/or franchise tax is filed.
These filings can be easy to forget—which is why we send our clients automatic reminders for your Delaware Annual Report and Franchise Tax filings. Or better yet, let us file for you. With our business renewal service, we send you the completed annual report for you to add your tax information, then submit the report for you for $100 plus the state fee and whatever tax is owed.
What should I know about Delaware corporate taxes?
In addition to the Delaware Annual Franchise Tax, there are other common taxes many corporations will pay. All C corporations engaging in business in Delaware have to pay the state’s corporate net income tax of 8.7%.
And while Delaware famously doesn’t have a state sales tax, don’t jump for joy just yet. Instead of a sales tax, Delaware has a gross receipts tax. Basically, instead of taxing the buyer, the state taxes the seller of goods (or provider of services). Current rates vary, but range from .0945% to .7468%.
Are there Delaware tax advantages for corporations?
Yes. Part of the appeal of a Delaware corporation is that Delaware’s tax structure can be pretty favorable to corporations (especially those formed in Delaware that don’t actually do business in Delaware). Delaware business tax advantages include:
- No Taxes on Intangible Property
Delaware doesn’t have a personal property tax on intangible property (like trademarks or patents), making Delaware an ideal place for holding companies.
- Not Operating in Delaware? No State Income Tax
If you aren’t located in Delaware and don’t do business in the state, you don’t have to pay the state’s personal or corporate net income taxes.
- No State Sales Tax
If you’re located outside the state, this may not mean much to you, but if your corporation makes significant purchases in Delaware, the lack of sales tax can be a great perk (if you make significant sales in the state, on the other hand, note that Delaware does have a gross receipts tax).
- No Tax on Stock Shares for Non-Residents
Don’t reside in the state? You don’t have to pay Delaware taxes on stock shares of a Delaware corporation.
Do corporations have to register with the Delaware Department Of Revenue?
Yes. If you conduct business in Delaware, you’re required to register with the Delaware Department of Revenue. You can register via Delaware One Stop.
Delaware Corporation FAQs
How can I submit the Delaware Certificate of Incorporation?
You can file Delaware articles online (via Document Upload) or by mail. Online document uploads must be submitted during business hours (7:45am-11:59pm EST weekdays, minus Fridays when filings close at 10:30pm). Mailed filings must be submitted to the following address:
Delaware Division of Corporations
401 Federal Street
Dover, DE 19901
How much does it cost to start a Delaware corporation?
The minimum fee for filing a Delaware Certificate of Incorporation is $89. The fee increases if you have more than $75,000 in par value. (If you have a stock company with no par value, the fee increases by $.01 for every share of stock above 1,500.)
Hire us for a one-time fee of $314, including the state filing fees. Need it expedited? Your total cost is $364 for 1-day filing. Or, pay just $34 out the door with our VIP monthly payment option.
How long does it take to start a Delaware corporation?
On average, it takes the state 10-15 days to process corporation formation paperwork. During the peak months of March, June and December, it can take up to a month.
If you hire Northwest to start your corporation, we file online and typically have your Delaware corporation formed within 15 days. Or, pay just $50 more to expedite, and your corporation will be formed in 1 day.
Does a Delaware corporation need a business license?
Yes. Any person or entity conducting a trade or business in Delaware needs to obtain a general business license from the state. Depending on your business type and exact location, you may be required to obtain further licensing, as well. For example, the city of Dover has its own general business license that all entities operating within the city limits must obtain.
For some license applications you may need an EIN or a certified copy of your Certificate of Incorporation. At Northwest, we can streamline the process and get these for you—simply add on these items during checkout.
Why do so many businesses incorporate in Delaware?
Delaware is often considered one of the best places to form a business, not just in the US but worldwide. The numbers don’t lie. The Delaware Division of Corporations notes that more than 66% of Fortune 500 companies are homed in the tiny state of Delaware. Over a million business entities have their legal home in Delaware. There are literally more business entities in Delaware than people.
So what’s so special about Delaware? In addition to favorable tax laws, Delaware has something truly unique that attracts businesses: the Court of Chancery. This is a non-jury court that has dealt primarily with business law for over 200 years. Because the court has judges who are experts on corporate law (instead of juries) and a long history of court rulings that provide precedence and guidance, it has become one of the world’s leading courts for settling corporate disputes.
The corporate laws in Delaware make the Court of Chancery even more favorable. For example, the Delaware General Corporation Law has led to what is commonly called the “business judgment rule,” which is a presumption that a board of directors is working in good faith for the fiduciary benefit of the corporation. This rule is important because a board of directors needs to be able to take risks without fear of lawsuits. A lawsuit in response to a board’s decision would have to prove gross negligence with evidence that the board wasn’t working in good faith. These kinds of laws help corporations feel comfortable taking calculated risks—which are essential for the growth of any business.
There’s plenty of other beneficial Delaware business legislation as well. The Delaware Rapid Arbitration Act helps speed up arbitration processes, ensuring cases don’t drag out and waste excessive time and money. The approval of “exclusive forum” clauses in 2015 (invalidated in 2018 by the Chancery Court, then re-validated in 2020 by the Delaware Supreme Court) also means businesses can designate Delaware as the forum where any internal corporate cases must be settled. These are just a few examples of elements that create a favorable business climate and make Delaware one of the most corporate-friendly states in the US.
What is a foreign Delaware corporation?
A corporation formed outside of Delaware—but which conducts business in the state—is considered a foreign Delaware corporation. For example, if you incorporated in Maryland but decide to open a storefront in Delaware, you would be a foreign Delaware corporation. This also means you would need to register with the state by filing an Qualification Certificate of a Foreign Corporation with the Delaware Division of Corporations. Foreign corporations are required to file the Delaware Annual Report each year, though they don’t need to pay the franchise tax.
Can Northwest help me form a nonprofit corporation?
Absolutely! We’re happy to start a nonprofit corporation for you. Note that incorporating a Delaware nonprofit requires a different form. Delaware nonprofits do not file the state’s franchise tax but must file an annual report each year for $25.
What if I need Delaware mail forwarding?
Many people form corporations in Delaware but live elsewhere, making mail forwarding a common concern for business owners. Other business owners simply don’t want personal documents like bank statements arriving at their office for anyone to open. At Northwest, we include limited mail forwarding with our registered agent and formation services. For more robust needs, we also offer unlimited mail forwarding with a unique suite number as part of our premium Delaware mail forwarding service.
How to Order Delaware Incorporation Service
Our Delaware incorporation service is designed to be fast and easy—signing up takes just a couple minutes. Here’s how it works:
We offer flexibility with two different options for payment. You can pay everything up front, which includes a full year of registered agent service. Or, pay just $34 out the door with our VIP monthly payment option. With our VIP option, we also include an EIN. Just choose one of the buttons below, answer a few easy questions about your business and submit your payment.
Next, we’ll prepare and submit your Delaware Certificate of Incorporation to the Division of Corporations. In the meantime, you’ll have immediate access to your online account, where you can find useful state forms, pre-populated with your business information.
Once the Delaware Division of Corporations has approved your filing, we notify you that your Delaware corporation has been legally formed. You can now move on to next steps, like holding your organizational meeting and opening a bank account.