You're forming a corporation in Delaware, one of the most business-friendly states in the US. To get started, choose a unique corporation name that includes required words or abbreviations, and ensure it's available on the Delaware Secretary of State's website and as a web domain. Next, appoint a registered agent in Delaware to receive important documents on your corporation's behalf. Prepare and file your Certificate of Incorporation with the Delaware Secretary of State, paying the required filing fee. From there, you'll need to draft corporate bylaws, issue stock, obtain necessary licenses, and establish a shareholder agreement. As you continue, you'll discover the specifics of maintaining compliance and building a strong corporate foundation in Delaware.
Choosing a Unique Corporation Name
When forming a corporation in Delaware, you must choose a unique name that sets your business apart and meets the state's requirements. The name you choose will be the identity of your corporation, so it's essential to get it right. Delaware has specific rules for corporation names, and you'll need to ensure yours meets these standards.
First, your corporation's name must include one of the following words or abbreviations: Corporation, Corp., Incorporated, Inc., Company, Co., Limited, Ltd., or Association. Additionally, your name cannot be too similar to an existing corporation's name in Delaware. You can check the availability of your desired name on the Delaware Secretary of State's website.
It's also a good idea to check if the desired web domain is available for your corporation's name. You'll want to ensure that your corporation's name and online presence match to avoid confusion. By choosing a unique and available name, you'll be able to establish a strong brand identity for your Delaware corporation.
Appointing a Registered Agent
When you're setting up a corporation in Delaware, you'll need to appoint a registered agent to receive important legal documents on your company's behalf. This agent plays a crucial role in ensuring you're informed about lawsuits, tax notices, and other official communications. Now, let's explore the process of appointing a registered agent, their key responsibilities, and how they can protect your business from liability.
Agent Appointment Process
You'll need to appoint a registered agent in Delaware, a crucial step in forming your corporation, as the agent will serve as the official point of contact for receiving important legal and tax documents. This agent will be responsible for accepting service of process, which includes lawsuits and other legal notices, on behalf of your corporation. To appoint a registered agent, you'll need to provide their name and address in your Certificate of Incorporation. You can choose an individual or a commercial registered agent service to fulfill this role. If you're not a Delaware resident, it's recommended to use a commercial registered agent service that has a physical address in Delaware. This ensures that your corporation remains compliant with Delaware state laws and regulations. Once you've selected your registered agent, be sure to obtain their consent and include their information in your incorporation documents.
Agent's Role and Duties
As your corporation's official point of contact, your registered agent plays a critical role in maintaining compliance with Delaware state laws and regulations. By appointing a registered agent, you're ensuring that your corporation receives important documents and notices from the state, such as annual reports, tax notices, and legal summons.
Your registered agent is responsible for:
| Duty | Description |
|---|---|
| Receiving legal documents | Accepting service of process on behalf of your corporation |
| Forwarding important documents | Sending you legal documents and notices received from the state |
| Maintaining compliance | Updating your corporation's records and filing necessary documents |
| Providing a physical address | Serving as your corporation's official address in Delaware |
Agent's Liability Protection
By appointing a registered agent, you're shielding yourself from personal liability and ensuring your corporation remains compliant with Delaware state laws. This crucial step protects your personal assets, such as your home or savings, from being seized in case of a lawsuit or debt collection. Without a registered agent, you'd be personally responsible for receiving legal notices, which could lead to missed deadlines and unwanted surprises.
Preparing and Filing Articles
Now it's time to prepare and file your corporation's articles, a crucial step in forming your Delaware corporation. You'll need to draft this document carefully, ensuring it includes all required information. Next, you'll file the articles with the Delaware Secretary of State, officially registering your corporation.
Drafting the Document
You'll need to prepare and file a document called the Certificate of Incorporation with the Delaware Secretary of State to formally establish your corporation. This document will outline the basic details of your corporation, including its name, address, purpose, and structure. When drafting the Certificate of Incorporation, be sure to include the following essential information: the corporation's name, which must include "Inc." or "Corp." to indicate its corporate status; the corporation's purpose, which can be a general statement; the corporation's registered agent and their address in Delaware; the number of shares the corporation is authorized to issue; and the incorporator's name and address.
It's essential to ensure that the document is accurate and complete, as it will serve as the foundation of your corporation. You can find a template for the Certificate of Incorporation on the Delaware Secretary of State's website or through a legal document preparation service. Remember to review and proofread the document carefully before submitting it for filing.
Filing the Articles
With your Certificate of Incorporation drafted, it's time to prepare and file the document with the Delaware Secretary of State. This is a critical step in forming your corporation, as it officially registers your business with the state.
Before submitting your filing, make sure you have:
- Verified the accuracy of your Certificate of Incorporation, ensuring all information is correct and complete.
- Obtained the required signatures from the incorporator(s) and any other necessary parties.
- Determined the correct filing fee, which currently stands at $89, payable to the Delaware Secretary of State.
- Gathered all necessary supporting documents, such as a cover letter and any additional paperwork required by the state.
Once you've completed these steps, you're ready to submit your filing. You can do this online, by mail, or in person. The Delaware Secretary of State's office accepts filings Monday through Friday, from 8am to 4pm EST. Remember to keep a copy of your filed document for your records, as you'll need it to obtain an EIN and open a business bank account.
Drafting Corporate Bylaws
Your corporate bylaws will serve as the operational manual for your Delaware corporation, outlining the rules and procedures that govern its internal affairs. As the founder, you'll need to draft bylaws that establish the framework for your corporation's management, ownership, and daily operations. This document will outline the roles and responsibilities of directors, officers, and shareholders, as well as the procedures for holding meetings, electing directors, and making important business decisions.
When drafting your bylaws, consider including provisions for shareholder meetings, voting requirements, and the process for amending bylaws. You should also outline the duties and responsibilities of your corporation's officers, including the CEO, CFO, and secretary. Additionally, you may want to establish rules for record-keeping, financial reporting, and conflict of interest policies.
Remember to tailor your bylaws to your corporation's specific needs and goals. You can use online templates or consult with an attorney to ensure your bylaws comply with Delaware state laws and regulations. By establishing clear and comprehensive bylaws, you'll set your corporation up for success and minimize potential disputes or legal issues down the line.
Obtaining Necessary Licenses
As the founder of a Delaware corporation, it's essential to obtain all necessary licenses and permits to legally operate your business in the state. Delaware requires various licenses and permits to ensure compliance with state regulations. Without these licenses, you risk fines, penalties, or even business closure.
To ensure you're properly licensed, check if you need:
- Business License: Required for all Delaware businesses, this license is issued by the Delaware Division of Revenue.
- Sales Tax Permit: If your business sells goods or services, you'll need this permit to collect and remit sales tax.
- Zoning Permit: Verify that your business location complies with local zoning ordinances.
- Professional Licenses: Certain professions, such as healthcare or law, require specialized licenses to operate in Delaware.
Remember to research and obtain all necessary licenses and permits to ensure your Delaware corporation operates legally and safely.
Issuing Stock and Establishing
Now that you've obtained the necessary licenses and permits, you'll need to issue stock and establish a shareholder agreement to solidify your Delaware corporation's ownership structure. This is a crucial step in defining the ownership and management of your corporation.
You'll need to determine the number and type of shares to issue, as well as the ownership percentage of each shareholder. This will help establish the voting rights and decision-making power within the corporation. It's essential to carefully consider the share structure to ensure it aligns with your business goals and objectives.
A shareholder agreement outlines the rights and responsibilities of shareholders, including voting procedures, dividend distribution, and dispute resolution. Having a clear and comprehensive agreement in place will help prevent potential conflicts and ensure the smooth operation of your corporation. By issuing stock and establishing a shareholder agreement, you'll be well on your way to creating a solid foundation for your Delaware corporation.
Maintaining Corporate Records
With your shareholder agreement in place, you'll need to keep accurate and detailed records of your corporation's ongoing activities, financial transactions, and major business decisions. This is crucial for maintaining transparency, accountability, and compliance with Delaware corporate laws.
To ensure you're on top of your record-keeping, make sure to:
- Document all meetings and decisions: Keep a record of all board and shareholder meetings, including minutes, votes, and resolutions.
- Track financial transactions: Maintain accurate and detailed records of all financial transactions, including income, expenses, and asset transactions.
- Keep a record of corporate actions: Document all major business decisions, including changes to bylaws, articles of incorporation, and shareholder agreements.
- Store records securely: Keep all records in a secure location, such as a fireproof safe or a secure online storage service.
Conclusion
You've successfully filed your corporation in Delaware! Now, it's time to maintain your corporate records, issue stock, and obtain necessary licenses. Remember to review and update your bylaws as your business grows. With these steps, you've taken the first step towards building a successful corporation. Stay organized, stay compliant, and watch your business thrive.