How to Start a Corporation in Delaware
To start a Delaware corporation, you must file a Certificate of Incorporation with the Delaware Division of Corporations, pay a minimum $89 filing fee, and obtain an EIN from the IRS. The complete steps to incorporating in Delaware are as follows:
- File a Delaware Certificate of Incorporation
- Pay the Delaware Division of Corporations a minimum of $89
- Wait to receive a stamped copy of your Certificate of Incorporation
- Get a Federal EIN tax ID for the corporation
- Create Delaware corporate bylaws
- Take these documents to the bank and get a Delaware corporate bank account
- If you’re operating your business in Delaware, you’ll also need to register with the Delaware Division of Revenue to obtain a Delaware business license. However, if you’re simply registering your business in Delaware and are not actively engaged in commerce inside state lines, you will not need a Delaware Business License.
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Delaware Certificate of Incorporation free download. When you're done filling out the form, submit it to your state.
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5 Day Delaware Corporation For $314 Total
How to File a Delaware Certificate of IncorporationTo form a Delaware corporation, you file the Certificate of Incorporation in the following steps:
What is the Cost of a Delaware Corporation?
The minimum fee for filing a Delaware Certificate of Incorporation is $89. The fee increases if you have more than $75K in par value. (If you have a stock company with no par value, the fee increases if you have more than 1,500 shares of stock.) Also, if your Certificate has more than one page, you’ll pay $9 for each additional page. There’s a $50 fee for 24-hour expediting.
Hire Northwest and your total, out-the-door cost is $314 ($364 expedited). That includes state filing fees, registered agent service, essential corporate forms—and a hassle-free experience.Get Started
How much does a corporation in Delaware cost each year?
At least $225. The Delaware Division of Corporations charges a $50 filing fee for your corporation’s mandatory Annual Report. There’s also an Annual Franchise Tax with a minimum of $175.
Note: Even if you don’t actually operate your business in the state, you’re still required to file the Annual Report and Annual Franchise Tax.Get Started
What are the taxes for a Delaware corporation?
Does your C corporation engage in business in Delaware? You’ll have to file state corporate net income taxes. The Delaware corporate net income tax rate is a flat 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). Rates vary but range from .1037% to 2.0736%.
Is a Registered Agent Required for a Delaware Corporation?
Yes, you must list a Delaware registered agent on your Certificate of Incorporation. If you reside in Delaware, you can list yourself as your own registered agent—although you’d have to include your name and the street address where you’d be available during business hours. And, this information would become part of the permanent public record of your corporation. If you’re registering your business in Delaware but live elsewhere (like the majority of Fortune 500 companies), you won’t be able to be your own registered agent.
Many corporations in Delaware hire us to be their registered agent. They list our registered office throughout their Certificate of Incorporation. This way, as their corporation grows and changes, they don’t have to worry about updating addresses or shooing away unwanted visitors at their home or office. We also accept, scan and send any legal notifications the same day, so corporations can stay on top of their businesses from anywhere.Get Started
What is a Delaware Annual Report?
Your Delaware Annual Report is a form you submit by March 1st each year to confirm or update information about your corporation—specifically the corporation’s street address, and the names and contact info for all your directors (and at least one officer). The report must be filed online and has a $50 filing fee.
Sounds simple enough, right? It would be if the form weren’t combined with the Delaware Annual Franchise Tax.
Do I Need a Tax ID Number (EIN) for a Delaware Corporation?
Yes—not only does the IRS require corporations to have an EIN for federal tax filings, but if you have to get a Delaware business license, you’ll need an EIN to complete your application. You can get your EIN directly from the IRS for no fee. Or, skip the application and hire Northwest to get your EIN for you. Just add on EIN service during checkout when you sign up with Northwest.
Does a Delaware Corporation Need a Business License?
You won’t need a license if don’t have any physical presence in the state and don’t engage in any business there.
If you do plan to conduct any operations or do any business in the State of Delaware, you must get a business license from the Division of Revenue. You can apply for an annual business license online with Delaware’s One Stop Business Registration and Licensing portal. You’ll need your EIN to complete the application. The majority of licenses cost $75, but fees vary depending on business activities.
Depending on where you do business in Delaware, you may need local licenses as well. For example, the City of Wilmington requires businesses to have a city business license in addition to the state license.
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 over 65% 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 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.
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:
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.
What is the Delaware Annual Franchise Tax?
Together with your Annual Report, you’re required to pay your Delaware Annual Franchise Tax fee each year. This is a tax that applies to both C and S corporations. Just figuring out what you have to pay for your franchise tax can be a bit of a headache. There are two different Delaware Franchise Tax calculation methods, each with a different minimum 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 pay just the $175 minimum.
What if you file late? There’s a late penalty of $200 AND 1.5% interest per month, which can really add up, especially if your franchise tax obligation is pretty significant. Northwest will help you avoid these annoying late fees. We’ll send you reminder notifications when you hire us as your registered agent. Or, cross this report off your “to do” list entirely and hire Northwest to file your report for you each year.
Delaware Corporation Certificate of Incorporation Requirements
Your name must include “Association,” “Company,” “Corporation,” “Club,” “Foundation,” “Fund,” “Incorporated,” “Institute,” “Society,” “Union,” “Syndicate,” “Limited,” or an abbreviation for one of these words. Tip: While “Syndicate” has a nice ring to it, most businesses go with something short and sweet like “Corp” or “Inc.”
This Delaware street address will become part of the permanent public record of your corporation. Tip: Hire Northwest and our address will go here.
This can be a business that provides registered agent service (but not your corporation) or an individual Delaware resident. Tip: We recommend Northwest Registered Agent.
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. Tip: 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 signs and submits your Delaware Certificate of Incorporation. It doesn’t have to be a director, officer or anyone in your corporation. Tip: We’ll be your incorporator when you hire Northwest.