Using your Delaware Company with PayPal

When clients form a new Delaware company, several frequently ask about their company bank account and working with payment gateway providers such as PayPal.  Sometimes clients wish to open a PayPal Business Account for their company or link their PayPal account to an existing bank account. For many clients, an online payments system is vital to their company’s overall success. The platform offers a secure way to make and receive payments and is available in more than 200 countries. It also offers an App that allows clients to link their bank account with their PayPal account through a secure platform, and to send secure invoices to clients.

However to get that company PayPal account, the first step is to form your new company, and decide which entity type you would like to incorporate. Delaware continues to earn the reputation of being the ‘most business-friendly state in which to incorporate.’ The legal and liability protection of Delaware’s established corporate laws are incomparable to what is provided by any other state in the U.S. For this reason, Delaware is known as the ‘Incorporation Capital of the World.’ By forming your company in Delaware, you join tech savvy companies such as Amazon, Google, and Twitter. And while PayPal is headquartered physically in San Jose, California, they too are a Delaware company.

We can support clients to set up bank accounts or create a PayPal account in several ways. At Harvard Business Services, Inc. (HBS), we are happy to help you obtain and provide important information that may be required to open an account such as the approved Delaware formation documents and EIN (Federal Tax ID Number). We are also provide helpful templates for commonly required documents such as an Operating Agreement or Bylaws template and other organizational resolutions.

Setting up the PayPal Business Account begins with setting up your login information through the PayPal website. You will be able to create a login ID and setup a Password to access your account. PayPal will generally require basic information for the opening of the account such as:

• Your Business Name
• Contact Information such as the address, email address and phone number
• The Business Type (Corporation, Partnership, etc.)
• A Brief Business Description (service key words)
• Your company website (if already created)
• The currency you would like to send and receive payments in
• The EIN Number

PayPal also will ask specific identity questions to verify your identity.  For the specific identity questions, PayPal will generally ask for the following:

• The Last 4 Digits of your Social Security Number (If you have a US SSN)
• Date of Birth
• Home Address
• Business Address. (The principal place of business address is generally where the company actually physically operates even if based outside of Delaware and even the US.)

For this step in the process, and specifically, if you do not have a U.S. SSN, PayPal may require you to provide proof of your business’ existence (such as the approved formation documents or EIN), proof of identity (sometimes, clients sign up with a passport number, ITIN, or photo of a national ID) and proof of address. PayPal may ask you to confirm your U.S. tax status even if the company is located outside of the U.S. 

For help or guidance pertaining to specific tax matters or help completing this part of the process, clients will often consult with a tax professional for assistance. If you have specific questions regarding the opening of a PayPal account, that are better answered by the company directly, we will recommend that you contact PayPal for guidance related to the opening of the account and the overall process.

If you have any questions or need assistance with forming a Delaware company, I can be reached at 1-302-645-7400 ext. 6144 or via email at Justin@delawareinc.com.