Instructions Forming a Delaware Corporation

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1 Contact Information State Business Entities Department: Delaware Department of State Division of Corporations Mailing Address: 401 Federal Street Suite 4 Dover, DE Physical Address: 401 Federal Street Suite 4 Dover DE Phone: Facsimile: Website: Entity Search: Forms & Instructional Video: Statutory Authority: General Corporation Law Del. Code Tit (2012) Forms Corporate Name Reservation Application Certificate of Incorporation Document Filing Sheet Combined Registration Application IRS Form SS-4 Application for Employer Identification Number IRS Form 2553 Election by a Small Business Corporation (used if electing S-Corporation tax filing status) General filing instructions 1. Verify availability of company name. 2. Complete the Certificate of Incorporation. a. The following information is legally necessary and sufficient to form a corporation in Delaware: i. Company name ii. Registered agent name and address iii. Business purpose iv. Quantity and par value of authorized shares v. Incorporator name, address, signature vi. Date b. Optional provisions: Although generally not recommended without a compelling business reason or the advice of an attorney, any provision which is required or permitted by any section of Delaware General Corporation Law to be stated in the bylaws may instead be stated in the Certificate of Incorporation. c. If the powers of the incorporator will terminate upon filing the Certificate of Incorporation, you must provide the name and mailing address of each person who will serve as a director until the first annual meeting of stockholders or until their successors are elected and qualify. 3. Complete the Document Filing Sheet. 4. Submit your completed documents, along with a photocopy of each and your filing fees, to the Delaware Department of State. Submissions may be made by mail or facsimile. Page 1 of 6

2 Fee Schedule Name Reservation (optional reserves your name for 120 days) Mail Processing time typically up to 15 business days $75.00 Online Processing time immediate $75.00 Certificate of Incorporation Filing Fee Your Delaware filing fee depends on the number and par value of shares $89.00 (minimum) you authorize. Expedite Processing time 24 hour $50.00 Processing time same day $ Processing time 2 hour $ Processing time 1 hour $1, Certified Copy $50.00 Annual Report & Franchise Tax Annual Report $50.00 Franchise Tax The minimum tax is $75.00 with a maximum tax of $180, $75.00 (minimum) Franchise tax calculator Combined Registration Application for Business License and/or Withholding Agent Business License The annual fee for a Delaware business license varies; however, the rate is generally $75.00 for a first location and at least $25 for additional locations. A separate license is required for each separate business activity. Varies Company name Select at least three names for your business. It must end with a corporate designator. In Delaware the specific corporate designators are: Association Company Corporation Club Foundation Fund Incorporated Institute Limited Society Syndicate Union or their abbreviation Conduct an entity search on the Delaware Department of State website to confirm the availability of your company name. If the name you want is available, you can reserve it online or by mail. The name reservation fee is $ Your name will be reserved for 120 days. NOTE: Reserving your company name is optional. When selecting your company name you need to take the following into consideration: 1. Your company name should be unique, easily remembered and pronounced, and set you apart from your competition. 2. Your company name must be available, i.e., your proposed name cannot be the same as or similar to an existing corporation. 3. Check domain name availability if you want your URL or domain name to be the same as or similar to your company name you ll need to verify that your desired company name is available as a domain name. 4. Verify that your company name does not conflict with any trademark or service mark by going to 5. Verify that your company name does not conflict with any copyright by going to Incorporator The incorporator is the person who completes, signs, and files the Certificate of Incorporation with the state. The only legal requirement for the incorporator is that they be at least 18 years old. The incorporator does not need to be a shareholder, director, officer, or employee of the corporation. For a fee, you can retain an attorney, accountant, or document filing service to be the incorporator. Page 2 of 6

3 If you complete, sign, and file the Certificate of Incorporation, then you are the incorporator. Registered agent The registered agent maintains a physical presence in the state to accept service of process, annual report notices, and other communications directed to the company and to forward the same to the company to which the service, notice, or communication is directed. Delaware law requires that every business entity have and maintain a registered agent in the state. The registered agent may be either a Delaware resident or active Delaware business entity that has a Delaware street address and consents to accept legal papers on your company s behalf. NOTE: Your company should not serve as its own registered agent. You can, however, personally serve as registered agent provided you are a Delaware resident and have a Delaware street address. Visit if you need help selecting a registered agent. Principal place of business The principal place of business must be the actual physical location of the business. It may not be a post office box. If your company is based out of your home, your home address will serve as the business address. Company inception date Your company inception date will be the date your Certificate of Incorporation is formally accepted and filed by the Delaware Department of State. Company duration Unless stated otherwise, Delaware allows your corporation to have perpetual duration, i.e., your corporation can exist forever. Unless there is a compelling business reason to limit the life of the corporation or upon the advice of an attorney to do so, there is no need to amend the Certificate of Incorporation. Tax filing status Unless you elect otherwise on IRS Form 2553 your corporation will be taxed as a C-corporation. C-corporations report their income and expenses on IRS Form 1120 and Delaware Form S-corporations use IRS Form 1120S and Delaware Form 1100S. Accounting year For accounting purposes, your accounting year (calendar or fiscal) should be specified in advance of preparing the bylaws. Consult with a qualified tax and accounting professional to determine what is best for your particular circumstances. Accounting method For accounting purposes, your accounting method (cash or accrual) should be specified in advance of preparing the bylaws. Consult with a qualified tax and accounting professional to determine what is best for your particular circumstances. Business purpose Delaware permits and includes a general-purpose clause on the Certificate of Incorporation: The purpose of the corporation is to engage in any lawful activity for which corporations may be organized under the general corporation law of Delaware. NAICS code Delaware does not require you to specify a NAICS code. Page 3 of 6

4 Quantity, class, and par value of authorized shares In Delaware the quantity of stock the corporation is authorized to issue and the par value per share is specified on the Certificate of Incorporation. Delaware bases their incorporation filing fees on the quantity and par value of shares authorized in the Certificate of Incorporation. Unless there is a compelling business reason to authorize a large quantity of shares or an attorney has advised you to do so, you ll want to authorize the maximum number of shares with the minimum fee. The $89.00 minimum fee allows you to have a maximum of 1,500 shares of no par value common stock or 5,000 shares of $15.00 par value common stock. NOTE: These quantities insure the minimum annual franchise tax of $75.00 using the Authorized Shares Method. Bylaws The corporate bylaws govern how you will manage and operate your corporation and conduct its affairs. The bylaws delineate the rights, powers, and duties of the corporation as well as the rights, powers, and duties of its shareholders, directors, officers, and employees. The bylaws do not supersede Delaware state law or any provision of your Certificate of Incorporation. After you receive notice that your Certificate of Incorporation has been accepted by the state, you will prepare and adopt bylaws. Shareholders The owners of the corporation are shareholders. You must have at least one shareholder. Directors The directors of the corporation have the ultimate authority and responsibility for managing the corporation. You must have at least one director. Officers The officers of the corporation are statutory officers and usually include a president, secretary, and treasurer. One person may hold all the offices. You must have at least one officer who, at a minimum, shall have the duty to record the proceedings of the meetings of the stockholders and directors in a book to be kept for that purpose. Optional provisions The state provided forms and these instructions ask for and specify what is legally sufficient and necessary to form a Delaware corporation. Nevertheless, Delaware General Corporation Law permits you to add other provisions to your Certificate of Incorporation. Optional provisions include anything the law permits to be in the bylaws. The most common optional provisions are the following: Terms and qualifications of directors Terms and qualifications of officers Indemnification of directors Indemnification of officers Powers, rights, and responsibilities of shareholders Powers, rights, and responsibilities of directors Powers, rights, and responsibilities of officers Page 4 of 6

5 Designation of different classes of stock Preemptive rights Cumulative voting rights Close corporation election If you need to include optional provisions in the Certificate of Incorporation you should consult an attorney. Post-formation Apply for a Federal Employer Identification Number (FEIN) on IRS Form SS-4. If electing S corporation status, file IRS Form 2553 within 75 days of when the election is to take effect. Hold an initial organizational meeting, prepare and adopt bylaws, prepare and adopt resolutions, appoint directors and officers, and issue shares. Open a company bank account. Comply with state and local labor and revenue requirements. Ongoing compliance File Annual Report and pay franchise tax on or before March 1 of each year. The Annual Report filing fee is $50.00 plus taxes due. The minimum tax is $75.00 and the maximum tax is $180, Annual Report notifications are sent to registered agents in December of each year. File Corporate Income Tax with the Delaware Division of Revenue. Protect the corporate veil as well as the shareholders, directors, and officers of the company by adhering to the following: Hold scheduled shareholders and directors meetings the date, time, and place for your meetings should be specified in the bylaws and should be scheduled regularly Hold special meetings when matters of importance come up: entering into a lease, opening a bank account, entering into a significant contract, entering into an employment agreement with key personnel, considering the sale or dissolution of the company Keep impeccable records record meeting minutes, maintain a company record book, maintain a stock ledger reflecting the stock ownership of the corporation and the names and addresses of the shareholders Draft formal resolutions resolutions should be drafted in matters such as the following: officer compensation, contract authorization, property acquisition, loans and guarantees, bank designations, dividend declarations, share issuance, asset purchases and sales, employee benefit plan adoption, financial statement and audit report approval Remember your fiduciary duty to the corporation the directors and officers must always do what is in the best interest of the company and shareholders and keep company matters confidential Sign all documents as an officer in the name of the corporation use a signature block in substantially the following form: By: Company name with designator Officer Title Never comingle all corporate purchases should be made in the name of the company, segregate company assets from personal assets, never use company assets for personal use, maintain company funds in a company account separate from personal accounts, maintain current financial records Page 5 of 6

6 Always comply with state rules and regulations, corporate charter, bylaws, organizational documents, and contractual obligations; file all appropriate federal, state and local tax returns and pay taxes when due; obtain all necessary permits and licenses Sufficiently fund the company maintain adequate capitalization and operating capital Page 6 of 6