1. Why Incorporate in Delaware?
2. Process of Incorporation
3. How Much Does Delaware Incorporation Cost?

To incorporate Delaware online, you will need to visit the Secretary of State's website and file the proper documentation. In particular, you will need to fill out and submit your Articles of Incorporation and pay the required filing fee.

Why Incorporate in Delaware?

While Delaware is one of the smallest states in the country, it is one of the most popular locations for incorporation. A large number of the largest publicly traded companies in the country have chosen to incorporate in Delaware because of the state's business-friendly laws. Delaware has a very low corporate tax rate, which is attractive to many companies.

Although it is possible to incorporate your business in your home state, incorporating in Delaware is usually a much better choice. Incorporating in this state provides a variety of benefits:

  • Flexible laws that apply to your entity.
  • Access to a low franchise tax rate.
  • Company members are not required to live in Delaware.
  • No sales tax. In addition, nonresidents do not pay income taxes.

Although there are some disadvantages to incorporating in Delaware, including the need to register as a foreign entity in your own state, they are heavily outweighed by the benefits of Delaware incorporation.

Process of Incorporation

If you want to incorporate your business in Delaware, there are a few steps that you must complete. Fortunately, the process of incorporation is very easy, and can be quickly completed online instead of having to file your documents by mail. The most important step of forming a Delaware corporation is filing an Articles of Incorporation. You must submit this document with the Delaware Secretary of State. On the Secretary of State's website, you can complete and file this document in a short period of time. Your Articles of Incorporation must include the following information:

  • Your corporation's name.
  • The purpose of your corporation.
  • The amount of authorized stock shares that can be issued.
  • Your Registered Agent's name and address.
  • The address and name of all your incorporators.

Before you file your Articles of Incorporation, you should make sure that the name you have chosen is distinguishable from the names of other corporations, partnerships, and limited liability companies in the state. You can perform a business entity name search online. If your name is too similar to the name of another registered business entity, you will need to choose a new name before you can complete the incorporation process.

If you are planning on forming an LLC, there are certain naming requirements with which you must comply. In particular, the name of your company must include the words Limited Liability Company, or an abbreviation such as LLC. The name of your LLC can include the names of company members.

If you plan to hire employees for your corporation, or if you want to open a business bank account, you will need to acquire a Federal Tax ID. You can request your Tax ID from the Internal Revenue Service (IRS). Your Tax ID will be instantly issued if you make your request online.

After your Articles of Incorporation have received approval, you will be issued a Certificate of Incorporation. This document proves that you have completed the incorporation process and that your business is now fully registered in Delaware. The Certificate of Incorporation is an important document, as many banks request to see your Certificate when applying for financing or opening a business bank account. All Delaware corporations must have a Registered Agent. Your Registered Agent is a person or business that accepts all legal documents mailed to your corporation, including notifications sent by the state and service of process.

How Much Does Delaware Incorporation Cost?

One of the primary benefits of incorporating in Delaware is that the cost of incorporation is very low when compared with other states. The minimum cost to incorporate in this state is $89. This amount is comprised of three separate fees:

  • Division of Corporations Fee: $50.
  • Filing Fee Tax: $15.
  • County Fee: $24.

Your actual incorporation cost can depend on the number of shares you plan to issue and the par value of each share. The minimum cost listed above would be for a corporation issuing 1500 shares that have no par value.

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