Delaware 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.

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.

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.

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).

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.

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%.

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:

1. 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.
2. 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.
3. 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).
4. 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.

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.

The minimum fee for filing a Delaware Certificate of Incorporation is $109. 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 $334, including the state filing fees.

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.

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.

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.

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.

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.

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. While you can use our address, we unfortunately do not have the capabilities to act as your return address for online or Amazon sellers.

It’s a conundrum: you need a local number to display on your website and give to customers, but you don’t want to make your personal number quite so…public. We get it. And we’ve got you covered with Northwest Phone Service. We can provide you with a virtual phone number in any state—plus unlimited call forwarding and tons of easy-to-use features. You can try Phone Service free for 60 days when you hire us to form your corporation, and maintaining service is just $9 monthly after that. No contract required.