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The Different Types of Corporations

types of corporations

Before you incorporate your business, you'll need to decide which type of corporation is right for your company. Delaware offers several types of corporations: general, close and non-profit. Whether you have a large company, small family business or a not-for-profit organization, there are options for everyone when it comes to choosing which type of corporation is best for your business.

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General Corporation

The Delaware general corporation is typically the most popular type of corporation. Business owners are attracted to its ability to go public and raise capital by selling shares of stock in the company. This type of corporation is also often used by companies that wish to attract venture capital funding. The general corporation has a formal structure: shareholders own the company via shares of stock, Directors run the company and are responsible for its overall management, and officers handle the company's day-to-day business. Please see our general corporation page for more information.

Close Corporation

The close corporation was designed for a tight-knit group, as it cannot have more than 30 shareholders. The transfer of stock is more restricted than it is for a general corporation—existing shareholders typically have the right of first refusal to buy stock before a stockholder can sell it to an outsider. Please see our close corporation page for more information.

Non-Profit Corporation

Non-profit companies are run by a Board of Directors, and they do not have shareholders. Some but not all non-profit corporations have members. Members don't own the company but they may be given the right to vote for the Board of Directors. If there are no members, then the Board itself votes on admitting Board members, perpetually. Tax exempt corporations must first form as a non-stock corporation and then apply to the IRS for non-profit status. Once granted, the corporation pays no U.S. federal income taxes, but it is required to file an informational return, listing the names and addresses of Board members and some financial information. Please see our non-profit corporation page for more information.

Are you ready to incorporate? Please visit our corporation order page or click the button below. If you have questions about the process of incorporating, our expert staff is available to help by phone at 800-345-2677, email or live chat.

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