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A Delaware Certificate of Incorporation is the foundation upon which a Delaware corporation is built. Until you receive the approved Certificate of Incorporation back from the Delaware Division of Corporations, you do not yet have a valid Delaware company.
One of the many benefits of forming a Delaware corporation is that the Directors’ names are not required to be listed on the Certificate of Incorporation. This serves as an added level of security for those people who value their privacy. It is also a nice feature in that, should an officer or Director change, the company is not obliged to file amendments with the Division of Corporations to update that information.
The public can obtain any Delaware company's Certificate of Incorporation simply by contacting the state and paying a fee; however, whether or not the pubic can ascertain the person/people behind the company depends on which, and how much, information appears on the Certificate of Incorporation.
An incorporator handles the preparation, execution and filing of the Delaware Certificate of Incorporation. An incorporator is an individual who forms a corporation on behalf of the Directors by filing the Certificate of Incorporation with the Delaware Secretary of State. The incorporator then names the initial Directors of the corporation until successors are elected and qualified internally within the corporation.
The powers of the incorporator are then discontinued, and the incorporator is no longer considered a part of the company. When you use Harvard Business Services, Inc. to form a Delaware corporation, Harvard is listed as the incorporator on your Certificate of Incorporation; it is signed by Richard H. Bell, II, the president of Harvard Business Services, Inc.
Some filing companies will, by default, list the Directors' names on the Certificate of Incorporation when filing it with the state. In addition to giving up your right to privacy, there are additional disadvantages to listing the Directors’ names on the Certificate. First is the fact that if you list Directors’ names, the state mandates you must also list Directors' addresses.
If the corporation's Directors don’t own or rent an office, their home addresses must be listed. This is not only troublesome but also tedious, as the information then has to be updated every time the listed addresses change. If an address is not properly updated, the Certificate is no longer accurate. Some filing companies and business formation companies use this tactic to acquire additional money from their clients. They typically charge between $350 to $500 each time the address needs to be updated on a Certificate of Incorporation.
They may also charge an additional fee if you ask them not to list the Directors on the Certificate from the start. At Harvard Business Services, Inc., we file all of our companies privately unless we are asked to do otherwise.
Listing the Directors' names on the Certificate of Incorporation is not the only way to illustrate a corporation's membership. Ownership in a Delaware corporation is created by issuing shares of stock. The issuing of shares is typically documented internally, in the company bylaws, as well as in the stock transfer ledger. This information is not required to be filed with Harvard Business Services, Inc., nor with the state of Delaware.
Be wary of companies that encourage you to list your corporation's Directors' names on your Certificate of Incorporation. This should be a red flag that the Registered Agent you have chosen may not be protecting your best interests or the best interests of your company. If you do choose to list your Directors' names on the Certificate, be sure you are doing so for the right reasons, such as an instruction from your attorney or accountant, or perhaps as a requirement of a business partner.
It is important to note that all Delaware corporations are required to file an annual report each year on or before March 1, naming all of the Directors and at least one of the officers. At this point, the names become part of the public record.
For additional information on forming a Delaware corporation, contact Harvard Business Services, Inc. at 1-800-345-2677.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.