Are you planning to incorporate your business in Delaware? If yes, then you are making the right choice. Delaware is widely recognized as the best state to form a corporation in the United States. This is because of its state laws that offer strong protection to businesses and their shareholders. However, incorporating in Delaware also means that you are going to face costs. In this blog post, we will provide you with some tips fromCorporation Center on navigating the costs of a Delaware C Corporation.
Registration fees
One of the costs that you are going to face when setting up a Delaware C Corporation is the registration fees. You will need to pay a fee to the Delaware Secretary of State for registering your corporation. The fee depends on how much-authorized capital your corporation has. A corporation with an authorized capital of up to $100,000 will have to pay $89, while a corporation with an authorized capital of over $1,000,000 will have to pay $9,000. You should budget for the registration fees accordingly.
Legal fees
Another cost you need to consider when setting up a Delaware C Corporation is legal fees. You will need to retain a lawyer to assist you in incorporating your business. The lawyer will help you prepare the certificate of incorporation and other necessary documents. The fees vary depending on the complexity of your corporation’s structure and the scope of the lawyer’s engagement. You should ensure that you get a quote from the lawyer before commencing work.
Franchise taxes
Delaware is known for its franchise tax. All Delaware corporations must pay an annual franchise tax. The franchise tax amount depends on the authorized capital of the corporation. The minimum franchise tax is $175, and the maximum is $200,000. The tax is due on March 1st every year. If you do not pay the tax by the due date, you will be liable to pay penalties and interest.
Statutory agent fees
All Delaware corporations must have a statutory agent in the state. The statutory agent is responsible for receiving legal documents and official correspondence on behalf of the corporation. You can appoint yourself as the statutory agent if you have a physical address in the state. Alternatively, you can hire a professional statutory agent. The fee for hiring a professional statutory agent differs from one company to another.
Miscellaneous costs
Apart from the costs mentioned above, there may be other miscellaneous costs that you need to consider. These costs may include obtaining a business license, obtaining a tax identification number from the Internal Revenue Service, and opening a bank account for your corporation. The costs vary depending on the service provider.
Incorporating in Delaware comes with costs. To navigate these costs, you need to be aware of what to expect. Registering fees, legal fees, franchise taxes, statutory agent fees, and miscellaneous costs are the major costs that you need to consider. You should budget for these costs accordingly. At Corporation Center, we provide incorporation services that help you set up a Delaware C Corporation at an affordable cost. Contact us today to learn more.
