A Delaware Company Register may be beneficial for you. See how incorporating in Delaware could help your business.

Benefits of Incorporating in Delaware

There are many benefits to incorporating in Delaware that include:

  • The Court of Chancery and Corporate Law: Constant business laws ruled on by judges instead of juries enables business owners to predict the outcome of a lawsuit before going to court.
  • Tax advantages: Holding companies pay no corporate tax under Delaware's tax code. This allows you to create a tax-free expense to yourself and in a large business, this can equal great savings.
  • Simple filing: Delaware corporations require little personal information, so filing is simple and information is secure.
  • Simple maintenance: Annual reports can be filed quickly and easily online.
  • Status: A Delaware corporation is taken more seriously.

Benefits for Small Businesses

  • Asset protection: Delaware allows separation of assets and the same limited liability to companies of all sizes.
  • No business license needed.
  • More security: forming a Delaware corporation requires minimal personal information, which prevents identity theft and simplifies tax filings.
  • Cheaper than an LLC: While LLCs are not required to file an annual report, they must pay an annual tax of $300. Corporations file a $50 annual report – foreign corporations pay $125 - and pay Delaware Franchise Tax, which, if your business has less than 1500 shares, the minimum is $175. Franchise tax is due March 1.
  • Tax exemptions: Delaware Corporations that don't do business in the state and companies taxed as S corporations are exempt from paying corporate tax.

How to Incorporate in Delaware

Delaware corporations are formed by filing a Certificate of Incorporation with the Delaware Division of Corporations. After completing the form, you can send it by mail or fax. Filing time is three weeks and the minimum fee is $89.

Stock fees are calculated based on assigned par value and authorizing more than 1500 shares will increase fees. There are fee calculators available on the Division of Corporation's website.

Corporation or LLC

Corporations are more formal than LLCs. While corporations require shareholder meetings and precise documentation, LLCs don't require annual shareholder's meetings and permit taxation as an S corporation or the default C corporation. To some investors, a Delaware corporation is more prestigious and feels more comfortable investing in corporate stock than with an LLC.

Delaware Corporations and Bylaws

Delaware doesn't require corporations to have bylaws, but they're useful and help increase your corporation's legitimacy.

Foreign Incorporation in Delaware 

To incorporate in Delaware from another country or state, you must have a Registered Agent in Delaware. There are some tax advantages available only to non-residents:

  • No inheritance tax on non-residents while residents could pay up to a 16%.
  • No sales tax.
  • No income tax for Delaware corporations doing business outside of Delaware.
  • No ad valorem tax, or intangible personal property tax.

Registering a Delaware Company in New York

New York requirements to register as a foreign entity:

  • Application for Authority form 
  • Certificate of Good Standing from Delaware
  • Filing fee
  • New York Registered Agent: Some people choose to be their own Registered Agent but others enlist Delaware Registered Agent for assistance.

Within 120 days, a foreign LLC must publish its Application for Authority in two separate newspapers for eight weeks. The affidavits of publication, certificate of publication form and filing fee must be filed with the New York Department of State. After registering, you may apply for local licenses. New York requires a biennial report with a filing fee of $9. This is filed by an officer and sent to the Registered Agent.

Delaware LLCs Doing Business in California

Delaware LLCs in California are domestic to Delaware and foreign to California. If your business will physically be in California, you must go through the process of Foreign Qualification to operate. 

California requirements to register as a foreign entity:

  • Limited liability company application
  • Delaware Certificate of Incorporation
  • Recent Certificate of Good Standing from Delaware
  • Registered Agent in California

Once registered, reports are due - the first within 90 days and biennial thereafter. The filing fee is $20 with a late fee of $250. California has a minimum franchise tax of $800/year. Foreign LLCs may not provide services in California. 

Before Incorporating

If you need help with registering your company in Delaware, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.