Delaware Corporation Search: Everything You Need to Know
A Delaware corporation search allows new business owners to make sure the name they've chosen for their company is unique.8 min read
2. Choose Entity Type
3. Search by Name
4. Search by File Number
5. Doing a Delaware Corporation or LLC Name Change
6. Why Incorporate In Delaware?
7. Delaware Corporation Advantages
8. Delaware LLC Advantages
9. How to Incorporate in Delaware
10. What are the Costs of Incorporating in Delaware?
11. What are Persistent Delaware Corporation Taxes and Fees?
12. What are Ongoing Delaware LLC Taxes and Fees?
13. Delaware Corporation Filing
14. Delaware LLC Filing
15. Do Delaware LLCs Need an Operating Agreement?
A Delaware corporation search allows new business owners to make sure the name they've chosen for their company is unique. You will not be allowed to register a name that is already used by another business in the state.
Delaware Business Entity Search and LLC Name Search
Doing a Delaware Business Entity Search helps you find out if a business name is available before your register. After registering, you can use the search tool to find your business information, as well as that of any other business that has filed with the Delaware Secretary of State.
Businesses that are applying can look through the Division of Corporation's files using names or file numbers. Tutorials for either method are available.
Choose Entity Type
To start off with the Name Reservation registration or the Delaware Business Entity Search, select a type of entity. In order to do a Delaware Name Search and or Name Reservation, you must first select a business type.
You can select from many types of businesses, from limited partnership to limited liability company, general partnership, corporation, statutory trust, and limited liability partnership.
Search by Name
The initial step is going to the Delaware name search webpage.
- First, type in the business name in the proper box and push “search.”
- Look at the results that the search has returned. You will be notified by the webpage if no businesses are at the moment utilizing the searched-for name.
- If no businesses are currently using the name, it can be used and registered.
Now you can also look at the details registered to the businesses found, which the Delaware Secretary of State has made publicly available.
- More details can be retrieved for a $10 or $20 fee. The fee varies depending on if you want to know the entity's status or their franchise's tax assessment.
- By searching using this function, you can discover if the business name is already being used in Delaware.
The state of Delaware is able to work with you on alternative options if you find your desired business name is already in use. The state is able to look for and give you the business's name, incorporation date, registered agent's name, their address, and their file code.
Search by File Number
To search by file number, go back to the original name search webpage and enter the business's file number that you hope to study. Usually, your search will just have a single result because just one business will have the file number you entered. You can look at much of the details for the business for free. If you would like more details, you can get it by paying a $10 or $20 fee, based on if you want to look at the entity's status or their franchise's tax assessment.
Doing a Delaware Corporation or LLC Name Change
Changing your Delaware LLC's or corporation's name is similar in many ways to when you initially chose and registered your business's name during its incorporation. The main difference is that there is more paperwork to do that connects the new name to the current business. The state of Delaware can assist with you finding out if the new name is open and in exchange for a fee will help you register it.
Why Incorporate In Delaware?
A significant benefit of incorporating in Delaware is that it gives attractive tax treatment to businesses that have their headquarters in other states. Because of this, some of the country's largest businesses select Delaware as their incorporation state. Specifically, over 58 percent of the Fortune 500 and 68 percent of the 50 biggest American businesses are Delaware-incorporated businesses. Over a million businesses in total are incorporated in Delaware.
Delaware Corporation Advantages
Advantages of incorporating in Delaware include:
- The most developed business structure laws in the country.
- Low franchise taxes.
- A corporation's shareholders, officers, directors, members, and management do not need to live in Delaware.
- There is no sales tax.
- The Court of Chancery, which usually presides over business cases, utilizes judges instead of juries. This is beneficial for big corporations especially.
- Corporations in Delaware, in contrast with other states, do not need to provide much information on their business filings. Shareholders and directors can, therefore, secure the privacy of their individual details.
- Delaware corporations can easily file their annual reports online, with just a little bit of information, and annual on the exact day as before.
Delaware LLC Advantages
Delaware LLC formation is very straightforward compared to other states. Only a little bit of information needs to be provided in the LLC's Certificate of Formation that is submitted to the Division of Corporations.
Only having to submit a little bit of information makes starting an LLC easy and keeps personal identity details private. Furthermore, Delaware LLCs file no annual reports, making the process even simpler.
Often called a “tax haven,” Delaware is the most pro-business state in the country. The state works to keep a friendly atmosphere for businesses and also provides incentives, including for LLCs, that aren't available in many other states.
- For example, intangible income is not taxed in Delaware (ex. patent leasing). Holding companies like to incorporate in Delaware because they have often many intangible assets.
There are also LLC incentives for LLCs that are not active in Delaware. Delaware LLCs are able to be taxed like an S corporation, C corporation, or a “pass-through” business. C corporation is the default tax status.
Perhaps the best aspect however of forming a Delaware LLC is because Delaware has many of the most renowned and intensively developed corporate laws in America.
Furthermore, Delaware state code Section 2301(b) and 2301(d) does not require Delaware LLCs not active in the state to get a license, sign up with the Revenue Department, or pay the state's tax on gross receipts.
Because incorporating and maintaining an LLC in Delaware is so easy and requires so little effort, it is an ideal path for many small businesses.
How to Incorporate in Delaware
The first step to incorporating in Delaware is to choose your business's name.
You need to ensure that the business's name fulfills the various name requirements and that it is not being already utilized.
After that, you have to then submit articles of incorporation to the state.
- You are required to obtain a Federal Tax Identification Number in order to create a business bank account or to bring on employees.
After your business's incorporation is finished, Delaware will send you an official certificate of incorporation. The incorporation certificate is often used as proof for your business when you seek financing or want to open financial accounts.
What are the Costs of Incorporating in Delaware?
The Delaware government fee for incorporating is at least $89. This consists of the filing fee ($15+), a fee for the county ($24), and fees for the Division of Corporations ($50). This minimum fee assumes a corporation that has 1500 shares that have zero par value. Varying based on the share number and the par value of those shares, the fee can fluctuate.
Delaware LLCs also face a similar $90 fee in order to file and form.
What are Persistent Delaware Corporation Taxes and Fees?
There are many tax benefits for corporations in Delaware.
- There is no sales tax in Delaware.
- The tax on small business franchises is small.
- Non-residents don't have individual Delaware tax liability.
Every Delaware-incorporated corporation needs to send in their yearly report, as well as submit franchise taxes. The annual reports fee for filing is $50, excluding taxes, for corporations that are domestic and non-exempt.
The lowest permitted corporate tax in Delaware is $175, which is for corporations that utilize an “authorized shares” process. The lowest permitted tax is $350 for corporations that utilize an “Assumed Par Value” capital method. For either class, the highest tax permitted is $180,000.
If a Delaware corporation owes at least $5,000 in tax estimates, then they can pay using quarterly installments. These installments require that 40 percent be paid by June 1, 20 percent be paid by September 1, 20 percent be paid by December 1, and the rest paid by March 1.
If the annual report is not finished and sent in prior to March 1, then there is a $125 penalty fee with 1.5 percent penalty interest a month to the remaining unpaid taxes.
What are Ongoing Delaware LLC Taxes and Fees?
In contrast with corporations, Delaware LLCs pay a yearly $300 tax but do not need to submit annual reports. These tax payments need to be paid by June 1st every year. There is a $200 penalty fee for not paying the tax or being late paying the tax. A 1.5 percent penalty interest a month is applied to the unpaid tax balance and penalty fee.
Delaware Corporation Filing
In order to incorporate, you need to register with the Division of Corporations in Delaware. Groups like The Company Corporation can help businesses find permitted names and register them.
The various filings have to be sent to Delaware. The state can assist you with filling out the filings and make sure that key details are not missing. The completed forms are sent to the state with the proper fees for filing.
You need to make sure to also select a registered agent who has an actual address in Delaware. If your company is not actually present in Delaware, you need to find someone else besides yourself.
After the incorporation documents are sent and deemed sufficient, you will get a certificate of incorporation from the state. This certificate is very vital for raising money and starting your business's financial accounts.
To keep your corporation in good status, you will have to annually file a report, as well as pay the franchise tax.
Delaware LLC Filing
When creating a Delaware LLC, you need to think about whether you will be a single-member LLC or a multi-member LLC. The LLC filing form has different questions compared to the corporate form. However, it is quite easy to fill out the LLC form because Delaware has an online form that helps you to comply with the requirements.
It is not needed to have an operating agreement under Delaware regulations, but it is very useful to create one.
- For LLCs that have two or more members, the operating agreement firmly states the duties, ownership, and obligations of the members.
Once the forms are done and sent, Delaware will return a “Certificate of Good Standing.” This certificate, like a corporation's certificate of incorporation, is vital for financing and creating financial accounts.
To keep your LLC in good standing you only have to pay a yearly tax. LLCs don't have to submit yearly reports.
Do Delaware LLCs Need an Operating Agreement?
In Delaware, LLCs do not need to use operating agreements. Furthermore, operating agreements don't have to be written. The operating agreements can be made orally, implied, or in writing.
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