Before Delaware Company Formation

There are several things to consider when starting a business, like choosing the company name and choosing the proper business structure. Before, during and after forming a Delaware company, our team at Harvard Business Services, Inc. is here to help set you up to succeed. There's a lot of research that goes into incorporating in Delaware, and we want to help jumpstart the process by providing a general list of steps to take before starting a business.

In this section, you'll find helpful information about why you should form your company in the state of Delaware, what steps to take in order to incorporate, how to choose an appropriate name for your company, what type of business entity suits you best and other things you should know before starting a business.

When you are ready to get started, contact our team, and we will walk you through the entire process and help you understand why so many companies choose Delaware as the home of their corporation or LLC.

Decide Which Type of Business Entity to Form

The first step when forming a Delaware company is to decide on the type of business entity you'd like to start. Depending on your business goals, here is a list of the most popular business entities to consider. Before starting your business, you can read more about each type by following their respective links:

• Limited Liability Company (LLC) - A small, flexible legal entity where the owners aren't liable for the company's debts or obligations. LLCs are easy to setup and have low upkeep costs.
• General Corporation (C-Corp) - The most common type of corporation, preferred for its ability to quickly raise capital, robust corporate structure, transferability, and capacity for growth.
• S-Corporation (S-Corp) - A corporation taxed under Subchapter S of the IRS code. S-Corps benefit from pass-through tax treatment, but have some restrictions in stocks and number of shareholders.
• Limited Partnership (LP) - A partnership consisting of both General Partners (who are financially liable for debts and are involved in day-to-day business operations) and Limited Partners (who have no obligations to make business decisions).
• Non-Profit Corporation - A corporation where individuals cannot benefit from earnings. The corporation is also usually tax exempt and doesn't have any shareholders or owners.
• Public Benefit Corporation - These corporations are for-profit goals while simultaneously pursuing a specific public benefit. These focuses can be on the environment, a local community, or society as a whole.

Should I incorporate as an LLC (or Other Entity) Before Starting the Business?

Generally, incorporating your company as an LLC or Corporation is the first step before doing any business. The LLC is by far the most popular type of entity. Incorporating your business makes sure that your company name is registered with the state, and simultaneously the company can obtain the Federal Tax ID Number. The company can then open a bank account and take any necessary next steps with obtaining business licenses.

Research Business Strategies for Your Company

Before becoming a business owner, try to develop a business strategy. Affirm the purpose of your business and how you plan to navigate toward your goals. By establishing a business plan that lays out your products and services, you'll have a clearer focus on your customer base. You can even conduct market research to justify how your product will fulfill your customers' wants and needs. Learn more about specific business strategies on our website.