Frequently Asked Questions and Answers About Delaware Corporations
Starting a Delaware business can be daunting3 min read
Starting a Delaware business can be daunting. For aspiring business owners, knowing the basics about the Delaware Corporation and how to set up one in the state can put them on the path to success. In this article, we will answer the most frequently asked questions about Delaware Corporations, as well as provide readers based in Dallas with access to reliable and experienced local counsel.
What is a Delaware Corporation?
A Delaware Corporation is a type of legal entity formed under the laws of the state by prospective owners called "incorporators." The owners, also referred to as "shareholders," record the necessary documents with the Delaware Division of Corporations to form their corporation.
The Delaware Corporation sets out the ownership structure, capital requirements, and management procedures, among others, to run the business. Similar to other legal entities such as a Limited Liability Company (LLC) or a partnership, the Delaware Corporation will put its owners and business operations in a unique legal position that sets them apart from the rest.
What is the Appeal of a Delaware Corporation?
One of the key benefits of Delaware Corporations is short decision-making timeframes. Incorporators view the Delaware state legislature as a corporate-friendly environment, creating laws that are optimized for business. This allows for an easy and streamlined formation process and makes corporate transactions and decision-making easier than in most other states.
Additionally, many Fortune 500 companies are established as Delaware Corporations due to the state’s exceptional legal environment. As such, many business owners view Delaware Corporations as the most reliable option for their business.
How Do I Set Up a Delaware Corporation?
All Delaware Corporations must have an in-state registered agent that is qualified to conduct business in the state. Prospective incorporators must also obtain and complete incorporation documents, and file the requisite paperwork and fees with the Delaware Division of Corporations. Documents must be signed and notarized by a qualified in-state notary.
The entire process usually takes around three weeks, depending on the availability of an in-state registered agent and the processing time at the state Division of Corporations. Prospective incorporators should consult experienced counsel to ensure all documents are completed in compliance with the Delaware Corporation law.
What are the Obligations of a Delaware Corporation?
Delaware Corporations are required to pay franchising and other taxes, as well as file the appropriate annual reports with the Delaware Division of Corporations. Additionally, Delaware Corporations can choose to register with the Securities Exchange Commission (SEC). This allows companies to conduct initial public offerings (IPOs) and sell their stock indoors or be publicly listed.
Finally, Delaware Corporations are bound by various corporate governance duties and rules that set out the owners’ rights and responsibilities under the Corporation. Such duties and rules usually vary depending on the business operations conducted by the Delaware Corporation.
What if I Need Help Forming a Delaware Corporation?
For readers based in Dallas, UpCounsel, an online platform for legal services, has a network of experienced business attorneys that can help. National clients like Airbnb and Eventbrite have trusted UpCounsel to provide high-quality, cost-effective legal services.
An experienced lawyer who focuses solely on business law and understands local regulation will help with the incorporation process. When you work with business lawyers from UpCounsel, you have access to experienced, reliable attorneys with an average of 14 years of experience. The attorneys’ profiles also display client ratings and reviews of the lawyer’s recent work.