Incorporation and LLC Information For Delaware

As you are evaluating what state to form your corporation or LLC, you may be considering Delaware. We strongly advise you to choose the state of Delaware for several reasons. Your decision to do this would be evidently beneficial to you. More than one half million corporations, both US based and offshore companies, have made similar choices. Delaware is universally recognized in the area of business law and is unchallenged in its international preeminence.

Over half of the Fortune 500 industrial firms and more than one out of three of all companies listed on the New York stock exchange and American stock exchange are chartered as Delaware corporations including American Express, Fedex, Amazon, etc...

Common Advantages of Forming in Delaware

• The Delaware General Corporation Law is the most advanced and flexible business formation statute in the nation.
• The Delaware business Court of Chancery focuses solely on business law and uses judges instead of juries. This Delaware Court has written most of the modern U.S. corporation case law.
• For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (there is a franchise tax, however).
• The taxation requirements are often favorable to companies with complex capitalization structures and/or a large number of authorized shares of stock.
• There is no personal income tax in Delaware for non-residents.
• Delaware does not require director or officer names (corporations) or member/manager names (LLCs) to be listed in the formation documents, thereby providing a level of anonymity.
• Shareholders, directors and officers of a corporation or members or managers of an LLC need not be residents of Delaware.
• Shares of stock owned by persons outside Delaware are not subject to Delaware taxes.

A factor to consider if you are evaluating forming your corporation or LLC in Delaware is whether you will need to foreign qualify your company in another state.

Corporations and LLCs are considered "foreign" in every state other than their state of formation. Foreign qualification registers a company to transact business in a state other than the home state.

Corporations and LLCs formed in Delaware often need to foreign qualify in their home state, since they have a physical location and employees there. If you are considering Delaware as the state of formation, you should include the initial and ongoing costs of formation and also foreign qualification costs in any other state(s) in your evaluation. For questions on which state is best for the formation of your business, please seek the advice of an attorney or an accountant.

Naming your corporation or LLC

When selecting a name for a corporation based in Delaware, it should be remembered that the name will be unique and will identify you as a separate entity transacting business in the state. The name you choose for the corporation must end with "Incorporated," "Corporation," "Corp" or "Inc.". When developing a name for a limited liability company it must end with "Limited Liability Company" or "LLC".

 The name you choose for your Delaware business will be identifying your corporation or LLC as a unique entity. The name will not be accepted if it is likely to mislead the public or if it too closely resembles the name of another corporation or LLC formed in Delaware.

You should not use any type of punctuation such as dashes, periods or commas in corporation or LLC name selection. It is recommended that you try to name your corporation or LLC so that it identifies with the goods or services you provide, but this is not required.

Selecting a Board of Directors:

A corporation formed under Delaware law can have several members listed as directors but is only required to have one member listed. Since the board is responsible for managing the corporation, it is suggested that the board be comprised of individuals that are officers or shareholders who have some type of daily involvement with the corporation. There is no minimum age requirement for a director in Delaware.

Delaware Taxes:

Delaware corporations are expected to file the Delaware Corporation Income Tax return, Form 1100 or Form 1100S annually, whether a "C" or "S" corporation. The amount of tax is dependent on a number of factors. All corporations are required to file an annual franchise tax report and pay a franchise tax. The minimum amount due is $30.00.

LLC's based in Delaware is required to file as either a corporation or a partnership dependent on the election made on the SS-4. Delaware maintains an individual income tax so employers are expected to withhold state income tax and unemployment tax. Delaware does not maintain a sales and use tax, but imposes a gross receipts tax on the seller of goods, or the provider of services.

Registered Agent:

The registered agent must have a physical street address within Delaware state. PO boxes are not acceptable, within Delaware. When you create a corporation or LLC with us your first year Registered Agent fee is included in the price.

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Incorporate Now in Delaware $150!

Form an LLC Now in Delaware $150! The most popular for small businesses

Additional Resources for Delaware Business Owners:

Tax information for businesses from the Delaware Department of Revenue
Delaware Secretary of State website

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