Delaware Corporation Filing Requirements
Delaware corporation filing requirements start with your Articles of Incorporation. This is the first step in starting your own company or nonprofit business.4 min read
Delaware corporation filing requirements start with your Articles of Incorporation. This is the first step in starting your own company or nonprofit business. Once this document is approved, it secures your business's name and creates the legal entity of the business. You can then apply for business licenses, apply for a tax ID, sign contracts, etc.
There are many benefits to incorporation. Some of these include:
- Personal liability protection for officers, directors, and shareholders.
- Incorporation fulfills the Delaware requirements to register your organization's or business's name.
- Offers governance and provides some added credibility to the organization or business.
Be mindful that although Delaware's Articles of Incorporation guidelines appear straightforward, articles that get filed by nonprofessionals are often lacking important information like add-on provisions that are necessary for 501(c)(3) eligibility.
Who Should Incorporate?
- Corporations that have stock and nonstock equity.
- Nonprofit and profit corporations.
- Close corporations.
Current state fees for the Articles of Incorporation are $89 plus $9 for each additional page. It takes around three weeks for processing, or you can request next-day expedited processing for somewhere between $50 and $100.
Corporation Filing Guidelines
Your corporate name has to be easily distinguishable from any other registered entity in Delaware, which includes other corporations, LLCs, and LPs. Start by searching to see if your desired name is available before you file your Articles of Incorporation. You must add a designator to your company name. This can be incorporated, corporation, or another similar abbreviation.
You have to declare a registered agent on your Articles of Incorporation. This can be a person or company that is willing to receive legal documents, lawsuit notices, or any other government documents on behalf of the corporation. Your agent is required to use a Delaware physical address, not a P.O. Box.
Your business must have a statement of purpose for incorporation. In Delaware, you can use a generic statement like “The purpose of this corporation is to engage in any lawful activity for which a corporation can be organized under Delaware's general corporation law.”
If you plan to issue stock, denote the number of shares that you are authorizing and what the par value per share is. You are not required to issue all shares, which means you can add shareholders down the line. Nonstock corporations and exempt companies need to state they will not have any capital stock.
Corporations must have at least one shareholder, although this person doesn't have to be listed on the Articles of Incorporation. A shareholder is someone who owns stock in the company and can vote on any business matters, like authorizing mergers, determining amounts and the classification of shares, etc.
Nonprofit Articles of Incorporation
There are two types of nonprofit corporations in Delaware — nonstock and exempt. You have to determine which one is applicable to your situation and use the appropriate Articles of Incorporation templates from the Delaware Secretary of State's website. To qualify for an exemption to Delaware's annual franchise tax, your organization must meet the §501(b) requirements. It likely qualifies if one or more following things apply:
- Is a civic organization.
- Was formed primarily for charitable or religious purposes.
- Is considered exempt under the Internal Revenue Code §501(c)(3) or a similar section.
- Is listed under §8106(a) Title 9.
- Is a fraternal or charitable organization.
- Is set up as not for profit, and there is no part of the net earnings that benefits any individuals or members.
Organizations that do not qualify for exempt status should file as a nonstock, nonprofit corporation.
Annual Obligations for Delaware Corporations
Your corporation must file an annual report and make its franchise tax payment on or before March 1. It is mandatory to file the annual report electronically. Do not rely on your registered agent to file these unless you provide specific instructions. In addition, you are required to hold an annual stockholders' meeting where you can elect or re-elect a board of directors. The bylaws of your Delaware corporation will set forth the required provisions of the annual stockholders' meeting and discuss the notice requirements.
At the time when it holds its annual stockholders' meeting, your corporation should also have an annual meeting of the board of directors where you can elect or re-elect corporate officers. You can also satisfy the annual meeting requirements through unanimous written consents that are signed by each stockholder and the directors of the corporation. Failure to satisfy these requirements can create a heightened risk of liability for individual stockholders for the corporation's obligations.
If you need help with Delaware corporation filing requirements, you can post your legal need on UpCounsel's marketplace. UpCounsel only accepts 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.