So you’ve made the decision to start a new business. Like so many other smart business owners, you’ve determined the best jurisdiction for your new company is the state of Delaware.
You did your research and decided which business entity is the best for your new company. The next question is: now what?
At this point, there are probably tons of questions swirling around your mind. Let’s start with the basics.
Federal Tax Identification Number: Also known as the EIN, it is kind of like a Social Security Number for your business. It's generally used for paying taxes, opening a business bank account, setting up a payroll, applying for new accounts with vendors, lenders, insurance companies and business licenses. You should apply for an EIN as soon as possible after forming your company. You can apply directly through the IRS, or we can take care of this laborious detail for you.
LLC Operating Agreement: This is basically the constitution for an LLC. Your LLC Operating Agreement should typically be put in place before your company commences business, right after filing the Certificate of Formation, as it addresses ownership; dictates how members are added/removed; determines management and day-to-day operations; outlines the distribution of profits/losses as well as hiring procedures, growth plans, dispute/mediation tactics and more.
A Delaware LLC Operating Agreement does not get filed with the state nor is it part of the public record. This enables members to make any updates or changes to an LLC internally, as the company grows and changes. The reputation and flexibility of Delaware LLCs is unrivaled and this is one of the main reasons why.
Corporation Compliance: If your new company is a corporation, you will have many things to think about and plan in order to stay in compliance, such as:
Unlike a Delaware LLC, there's a lot more upkeep required in a corporate structure. Traditionally, bylaws will need to be adopted. The Board of Directors is elected who, in turn, appoint the officers, the president, the vice president, the corporate secretary and the treasurer.
Board meetings are normally held at regular intervals and meeting minutes must be recorded. Both quarterly and annual tax returns may need to be filed, along with annual reports and Delaware Franchise Tax.
Marketing Plan: From determining and connecting to your target demographic to your SEO, PPC or advertising strategy, a marketing plan is an integral part of any company. Are you going to utilize social media? Are you going to handle content creation in-house or outsource it? Your chances of success hinge upon solid marketing, or lack thereof. You don’t want to overlook this detail.
Website/Domain Name: Are you planning on creating a website for your new company? If so, it may be smart to check domain name availability concurrently when checking the company name in Delaware to keep things uniform.
DBA: Although DBAs are almost a thing of the past, the term still gets thrown around quite a bit. DBAs are nothing more than a fictitious name or trade name. They are less common these days since most clients tend to form a company under the name they plan to use.
Business License: You may need a business license and/or permits in order to operate locally. Business licenses are traditionally handled at the county level through the Division of Revenue. You can also check with your local SCORE office if you have questions about business licenses.
In conclusion, once you’ve determined to form a Delaware company, there’s still lots of formalities to take care of before you’ll be officially good to go, but you can count on us to guide you through the maze.
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.
There are 2 comments left for You Incorporated Your Startup Company. Now What?Daniel Jameson said: Tuesday, June 5, 2018
Hi, Thanks for sharing a good information. It is very helpful to start a new business startup.HBS Staff replied: Tuesday, June 5, 2018
Thanks for reading our blog! Best of luck to your startup!THOMAS EDISON INTERNATIONAL UNIVERSITY said: Wednesday, August 9, 2017
I formed this LLC on 24th July 2017 through HBS. What are the other steps to proceed further?HBS Staff replied: Wednesday, August 9, 2017
Your other steps and options are listed in the blog: