A Delaware corporation registration number will be issued to your corporation after you have completed the formation process. Your registration number, used to identify your company, will be seven digits.

Requirements for Corporations in Delaware

Corporations in Delaware must comply with several requirements, including maintaining corporate records. You should store these records at your principal business address, and they must include the following documents:

  • Bylaws
  • Certificate of Incorporation
  • A shareholder list
  • Accounting books and records
  • Minutes for board of directors' meetings and shareholders meetings

Delaware corporations are also subject to filing and taxation requirements. For instance, all corporations in this state have to file an Annual Franchise Tax Report. They must file this report by March 1 along with a $50 fee. The actual franchise tax your corporation will pay depends on both how many shares your company has issued and each share's par value. Also, your filing fee may increase if your company has issued more than 5,000 shares.

Several others state taxes may apply to your corporation. You can visit the State of Delaware website to learn about the different taxes that your corporation will need to pay.

If your corporation intends to hire employees, you must obtain a federal tax identification number. Your federal tax ID is also known as an Employer Identification Number (EIN). Your business must have an EIN in order to pay federal employment taxes and open a business bank account. Delaware requires no state tax ID number.

Delaware Incorporation Advantages

Choosing to incorporate your business in Delaware provides several advantages. For starters, Delaware features some of the most business-friendly and modern corporate statutes in the country. These statutes make forming and running your corporation much easier than in other states, so you should strongly consider incorporating in Delaware.

Having access to the Court of Chancery is another benefit of Delaware incorporation. The Court of Chancery exclusively handles disputes related to corporate laws and features judges who are very familiar with these entities. Because Court of Chancery judges are corporate law experts, cases heard in the Court are usually resolved very quickly.

Questions About Incorporation

If you're considering incorporating your company in Delaware, or in another state, you likely have several questions about the process. For instance, most business owners wonder if incorporating is the right choice for their business, and what advantages they may receive from completing this process.

The primary benefit of forming a corporation is that it is a separate legal entity from its owners, which means that shareholders enjoy limited liability protections. Corporations can also last in perpetuity, so you won't have to worry about your company ending if an owner dies or decides to exist the company. Corporations provide certain tax advantages not available to other business entities, and they also exude a more professional image. Finally, corporations have an easier time raising capital than other business.

Many people interested in forming a corporation also question if they need a corporate seal, as well as when and where they might need to use the seal. Your corporation definitely needs a corporate seal, even though having one is not a legal requirement. For instance, you might need a seal to sign official forms or banking documents. If your corporation is entering into a contract, the other party may request that you include your corporate seal on the document.

Another common question related to incorporation is whether you need to hire an attorney to help you with the process. While you are not required to hire an attorney to help you with incorporation, having an experienced attorney can make the process considerably easier. Your attorney will understand the pitfalls that may interfere with incorporation and can explain to you the tax and management implications of starting your company. An attorney can also make sure your formation documents are written correctly so that you don't have to deal with a rejected application.

An attorney can also determine whether forming a corporation is the right option for your business. While forming a corporation is a good choice for many companies, smaller business may benefit more from forming a limited liability company (LLC). Your attorney can make sure you choose the right entity type for your business.

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