You're forming a corporation in Delaware, a top choice for businesses due to its business-friendly laws. To get started, choose a unique and distinguishable corporate name that complies with state naming requirements. Next, appoint a reliable registered agent with a physical address in Delaware to receive legal documents. Then, file a Certificate of Incorporation with the Delaware Secretary of State's office, including vital information about your corporation. After that, obtain necessary business licenses and permits, issue stock, and establish governance structures. Finally, obtain a federal tax ID number for tax purposes. Now, take the next step to complete the process and ensure your corporation is fully formed.
Choose a Corporate Name
When forming a corporation in Delaware, you must choose a unique and distinguishable corporate name that complies with the state's naming requirements and doesn't infringe on existing trademarks. This is crucial as it will be your business identity, and any mistakes can lead to legal issues.
Delaware law requires that your corporate name includes a designator such as "Inc." or "Corp." to indicate that it's a corporation. You'll also need to ensure your chosen name isn't already in use by searching the Delaware Division of Corporations' database.
Additionally, you should conduct a trademark search to ensure your desired name doesn't infringe on existing trademarks. You can use the United States Patent and Trademark Office's database for this purpose.
Appoint a Registered Agent
Now that you've chosen a corporate name, it's time to appoint a registered agent. You'll need to select an agent who meets Delaware's requirements, and you'll want to ensure they're qualified to receive important documents and legal notices on your corporation's behalf. In the following sections, we'll explore the requirements for an agent and what qualifies them to serve in this critical role.
Agent Requirements
To form a corporation in Delaware, you must appoint a registered agent with a physical address in the state to receive legal documents and service of process on your company's behalf. This agent will act as a liaison between your corporation and the state, ensuring you're informed about important legal matters.
You can't serve as your own registered agent, as the agent must be a separate entity or individual with a physical address in Delaware. You can either hire a commercial registered agent or appoint an individual, such as a lawyer or business partner, who meets the state's requirements. Make sure your agent is reliable and trustworthy, as they'll be responsible for receiving and forwarding important legal documents to you.
It's essential to choose an agent who can provide timely notifications, as failure to respond to legal notices can result in severe consequences, including fines and even dissolution of your corporation. By appointing a reliable registered agent, you'll ensure your corporation remains compliant with Delaware's laws and regulations.
Qualifying the Agent
You'll need to provide the required information and documents to qualify your registered agent, ensuring they meet Delaware's specific requirements. This step is crucial in forming your corporation, as your registered agent will be responsible for receiving important legal and tax documents on your behalf.
To qualify your registered agent, make sure they:
- Are a resident of Delaware or a corporation authorized to do business in the state
- Have a physical address in Delaware (no P.O. boxes allowed)
- Are available to receive legal documents during regular business hours
File Certificate of Incorporation
Delaware's Secretary of State requires your corporation's Certificate of Incorporation, a foundational document outlining your company's structure and purpose, to be filed with their office. This crucial document serves as the official formation of your corporation, providing essential details about your business. You'll need to include vital information such as your corporation's name, address, purpose, and the number of authorized shares.
When preparing your Certificate of Incorporation, you'll need to ensure it meets Delaware's specific requirements. You can file online or by mail, but be aware that online filings are typically processed faster. You'll need to pay a filing fee, which currently stands at $89. Make sure to carefully review your document for accuracy, as errors can delay processing.
Once you've successfully filed your Certificate of Incorporation, the Secretary of State will review and verify the information. Upon approval, your corporation will be officially formed, and you'll receive a stamped and approved copy of your Certificate of Incorporation. This marks a significant milestone in establishing your Delaware corporation.
Obtain Business Licenses
After forming your corporation, you need to obtain necessary business licenses and permits to operate legally in Delaware. This is a crucial step to ensure your corporation is compliant with state and local regulations.
To get started, you'll need to determine which licenses and permits are required for your specific business. This may vary depending on the type of business, location, and industry.
Here are some key licenses and permits to consider:
- General Business License: This is a basic license required for all businesses operating in Delaware.
- Sales Tax Permit: If your business sells taxable goods or services, you'll need to obtain a sales tax permit.
- Zoning Permit: This permit ensures your business is operating in a zone that allows commercial activities.
Remember to check with the Delaware Division of Revenue and other relevant authorities to determine the specific licenses and permits required for your business.
Issue Stock and Establish Governance
With your corporation formed and necessary licenses obtained, now it's time to issue stock and establish governance to ensure a solid foundation for your business. This is a critical step in setting up your corporation, as it defines the ownership structure and decision-making processes.
To issue stock, you'll need to determine the number of shares to authorize and the initial ownership distribution. This will involve deciding how many shares each founder or investor will receive, and at what value. Be sure to document these decisions in your corporate records, as they'll be important for future reference.
Next, establish a board of directors to oversee major decisions and ensure the corporation is operated in the best interests of shareholders. Define the roles and responsibilities of each director, and set a schedule for regular meetings. You'll also need to establish bylaws, which outline the rules and procedures for corporate governance. By taking these steps, you'll create a strong foundation for your corporation and set yourself up for long-term success.
Obtain Federal Tax ID Number
You'll need to apply for a federal tax ID number, also known as an Employer Identification Number (EIN), which the IRS uses to identify your corporation for tax purposes. This unique nine-digit number is required for tax filing, opening a business bank account, and hiring employees.
To obtain an EIN, you'll need to apply online through the IRS website or by phone. You'll need to provide your corporation's name, address, and other identifying information.
Here are the steps to apply for an EIN:
- Apply online: Visit the IRS website and follow the application process. You'll receive your EIN immediately after submitting your application.
- Apply by phone: Call the IRS Business and Specialty Tax Line at (800) 829-4933 and follow the prompts to apply for an EIN.
- Apply by mail: Complete Form SS-4 and mail it to the IRS. This method takes about four weeks to process.
Remember to keep your EIN confidential and secure to prevent identity theft and fraud.
Conclusion
You've taken the first steps to forming a corporation in Delaware! By choosing a unique corporate name, appointing a registered agent, filing your certificate of incorporation, obtaining necessary licenses, issuing stock, and establishing governance, you've set yourself up for success. Don't forget to get your federal tax ID number to finalize the process. With these steps complete, you're ready to start operating your new corporation.