Forming a Corporation in Delaware

Why Form a Corporation?

Forming a Delaware Corporation offers a number of benefits over other entity types:

• Limited Liability - Shareholders will not be liable for the debts of the company, meaning that their personal assets are protected.
• Easy to Raise Capital - It's easy to raise money as a corporation by selling shares of stock.
• Easily Transfer Ownership - Ownership of a corporation is easy to transfer via the transfer of stock (S Corporations have some restrictions).
• Perpetual Existence - A corporation can continue to exist even if an owner, shareholder, director, or officer leaves the business, providing greater continuity.
• Clear Management Structure - Corporations have a defined governance structure involving shareholders, a board of directors, and corporate officers.

Why Form a Corporation in Delaware?

After you've decided to form a corporation, you'll need to choose a state. Delaware has long been one of the most popular states for incorporation, particularly among startups and large corporations. Some of the key benefits of forming a corporation in Delaware include:

• Business-Friendly Corporate Laws - The Delaware General Corporation Law (DGCL) gives corporations plenty of flexibility when structuring their business.
• Delaware's Court of Chancery - This court specializes in corporate and business disputes. Cases are decided by judges with extensive experience.
• Predictable Corporate Law - Delaware has developed an extensive body of corporate case law over many decades, setting legal precedent for many cases.

You can also learn more about why companies incorporate in Delaware on our website.

Form a Delaware Corporation in 6 Steps

When you're ready to form a Delaware corporation visit our user-friendly corporation order page. Here is a brief overview of how to form a company in Delaware.

1. Choose a Type of Corporation That's Right for You

There are several options to choose from when forming a Delaware corporation. Typically, the general corporation is the most popular, but the close and non-profit corporations offer many benefits as well. If you are not sure which type of corporation is right for you, you can compare details about each type on our general, close, and non-profit corporation pages.

2. Choose a Company Name

One of the most important decisions when forming a Delaware corporation is choosing a company name. If your company already has a name, you can usually incorporate using that name as long as it isn't already taken and meets Delaware's corporation naming guidelines. If you're not sure what to name your company and need guidance, see what Delaware requires in a corporation name, as well as what's prohibited and what's wise.

Once you've decided on a name and you wish to see if it is available, Harvard Business Services, Inc. offers a free business name search service to assist you. If you want to learn more, be sure to read more about how to do a Delaware business name search before you start a corporation in Delaware.

3. Choose a Registered Agent

A Registered Agent is the liaison between your company and the state, and is a requirement for Delaware corporations. Registered Agents are responsible for receiving important legal and tax documents on behalf of the corporation. They must be located in the state where the company is incorporated, and their information is listed on the public record via the Certificate of Incorporation.

Harvard Business Services, Inc. is the premier Delaware Registered Agent, and our Registered Agent Fee is just $50 per year, guaranteed for the life of your company, as long as your company remains in good standing with the state of Delaware. See how our low fee compares to that of our competition.

4. Select Your Delaware Corporation's Director(s)

To release the corporation as your incorporator (i.e., one who prepares, executes, and files your Certificate of Incorporation), Harvard Business Services, Inc. requires that you provide at least one Director's name when incorporating a company. Please note: This information will not appear on the Certificate of Incorporation for the public record and does not limit your ability to name other people to your Board of Directors.

5. Determine Your Stock Information

When filing a general or close corporation, the amount of stock for your company, as well as the par value of its shares, needs to be authorized, regardless of whether or not you plan to issue stock.

Delaware Franchise Taxes are based on the number of shares; therefore, whenever possible, corporation owners prefer to keep the number of shares low. When you form a Delaware corporation, you should plan to authorize only what you'll need, or think you may need. Corporations with 5,000 or fewer authorized shares pay the minimum Delaware Franchise Tax each year. Those that exceed 5,000 shares are able to recalculate the corporation's Franchise Tax using one of two methods: the Assumed Par Value Capital Method and the Authorizing Shares Method.

Please see our company stock FAQs for more details on authorizing stock and setting its par value.

6. Form Your Delaware Corporation

Now that you know how to form a Delaware corporation, visit our corporation order page or click the button below to get started. If you have questions about how to set up a Delaware corporation, our expert staff is available to help via phone at 800-345-2677, email, or live chat.

Costs to Form a Delaware Corporation

The cost to form a corporation is different from state to state. At Harvard Business Services, Inc., you can form a corporation for just $229. This package includes the $109 state fee, a year of Registered Agent services, and more.

Corporations should also budget for ongoing expenses. Delaware corporations generally must file an annual report, which currently carries a $50 filing fee for non-exempt domestic corporations, and pay an annual franchise tax. The minimum franchise tax is $175 under the Authorized Shares Method or $400 under the Assumed Par Value Capital Method.

Additional costs may include registered agent fees, legal or formation-service fees, and fees required to register the corporation in other states where it does business.

Ongoing Compliance

To remain in good standing and preserve the benefits of the corporate structure, corporations must keep up with certain state filings, taxes, records, and corporate formalities. Some of the primary ongoing requirements include:

• File an Annual Report
• Pay Delaware Franchise Tax
• Maintain a Registered Agent
• Keep and Update Corporate Records
• Hold Required Meetings

Once you've set up your Delaware corporation, we encourage you to learn more about receiving your company's Certificate of Incorporation and what to do after forming your company.