How To Incorporate Your Business In Delaware?
Delaware is one state in the US known for its pro-business laws. For business owners – small, new, medium, or start-ups – the land offers a fantastic opportunity to get a business started at minimal costs and time. And, why not? The cost of forming a Delaware incorporation is the least in the entire US. And, not just that! There is no income tax that businesses need to pay in Delaware. Plus, capital stock is not taxed, especially for small businesses like corporations and LLCs.
Many business owners might feel that forming and incorporating a business in Delaware must be long-drawn and time-consuming. However, the fact is far from it. If you know the steps of incorporating a company in Delaware, you can quickly begin and end the process.
Steps of Delaware incorporation
Step 1: Naming your business. Step number one revolves around choosing the right name for the business. You need to spend some time, effort, and money to ensure that the name is as per the brand’s image, message, and how you wish to position your products and services. There are many tips on how to name a business well, and you can take help from experts. In the end, it is vital to choose a name that is easy to understand, recollect and identify. Also, the name should be followed by an LLC in case of a Limited Liability Corporation or Inc. in case of a corporation. Finally, you need to have a state name check conducted to be one-hundred percent sure that the name has not been taken already by another corporation or LLC in your preferred state of incorporation. With the help of a professional Delaware State Guide, you can gain more details about the naming requirements and incorporate a business in Delaware.
Step 2: The next step for Delaware incorporation is recruiting and appointing managers and directors.
Accordingly, you need to be well abreast of the Corporation and LLC requirements to appoint managers and directors for your business.
- For LLCs, the requirements are:
- LLCs need to have at least one pr more members.
- There is no age limit to becoming a member or manager of an LLC.
- There is no specific limitation on the residence of the members or managers.
- LLCs do not have to mention the name and addresses of appointed members and managers to receive the Certificate of Formation.
- For Corporations, the requirements are
- A corporation in Delaware needs to have one director at least or more.
- There is no age limit to becoming a member or manager of an LLC.
- There is no specific limitation on the residence of the members or managers.
- The name and addresses of appointed members and managers of the Corporation need not be listed to receive the Certificate of Formation.
Step 3: Filing the papers
The last step involves filing the papers with the authorities. The certificate of incorporation is handed over to Corporations and LLCs.
Remote incorporation in Delaware is permitted. You need to speak to an expert who can seamlessly guide you through the process.
Step 4: Filing Annual Report
Delaware makes it mandatory for corporations to file the yearly Franchise Tax Report. It needs to be filed every year by 1st March, and the filing fee is $50 for a corporation with 5,000 shares. For more shares, the fee may be increased. LLCs need to file their Annual Franchise Tax Statement too. The fee for the same is $250.
Step 5: Obtaining business permits
Businesses need to procure a license or permit in Delaware to start work. For almost all types of business types, a permit is a must. The license might have to be taken at the municipal, state, and federal levels. You also need to obtain the Federal tax identification number or EIN and open an account with a bank.