Are you the owner of a company interested in forming a Delaware corporation? In such a case, you will want to devote some time to researching the steps involved in establishing a Delaware company. Among the states in the United States, Delaware is often regarded as one of the most business-friendly, and establishing a company in this state may result in several advantages. This article will provide an overview of the processes involved in creating a Delaware company and discuss some of the benefits associated with doing so. Do you have a fantastic concept for a new company that you would want to develop to the next level? If this is your situation, incorporating it into the state of Delaware could be the next logical move for you to take. The following are some steps that will assist you in getting started:
Choose a Name for Your Company
If you haven’t already chosen a name for your business, one crucial factor is how easily it will be mistaken with the names of other firms or trademarks. In addition, keep in mind that companies are required to conduct their business under a name distinct from that of their parent firm. It is essential to keep in mind that the content that may be included in your firm’s name will be subject to various limits and guidelines. After you have decided on a name for your company, visit the Delaware Division of Corporations website to see whether or not that name is already in use. You are free to go on to step two, which is submitting the papers necessary to form a Delaware corporation if there are no problems with the name.
Get an Employer Identification Number (EIN) From The IRS
Even if you don’t have any workers on your payroll, the Internal Revenue Service will almost certainly need you to get an Employer Identification Number or EIN. The Employer Identification Number (EIN) is used to identify your company. You need one to establish a bank account, receive a tax ID number from the state, obtain business permits, and register with government organizations. You may apply for one by filling out this form on the website of the IRS. Once you have obtained your EIN, be sure to save it in a secure location since you will be required to provide it whenever you do business with a government agency or a private contractor whose services need your firm’s identity.
Draft Articles of Incorporation and File Them with The Delaware Secretary of State
Ensure to draft the articles for forming a Delaware corporation. When you register your company with the state, these documents are submitted. If you want your articles to be filled out in a manner that assists in protecting your firm, it may be worthwhile to hire a genuine lawyer or an accountant to do it for you. Creating your articles online with one of the numerous organizations that are now available may be a simple process.
After all, to shield oneself from legal responsibility, you need the assistance of someone knowledgeable in the subject matter. Before submitting your paperwork with the state, you should also consider registering a trademark for your company name. Trademarks are phrases, symbols, or designs used to identify the source of goods or services sold in commerce and differentiate them from the products or services offered by rivals.
Appoint Directors and Officers for Your Company When Forming a Delaware Corporation
Make the necessary executive and director appointments for your organization. You will be required to name at least one director and one officer, but you are free to have as many of each position filled as you see fit. You may continue with the process of forming the company even if none of these persons are located in Delaware, but if at least one of them is, it will be much simpler for you to do so. A person who is permitted to sign legal papers on behalf of the business must be at least 21 years old to serve as a director or officer of the company; thus, you need to be sure that the person you choose is responsible enough to manage the level of responsibility involved. In most cases, the paperwork that appoints someone will also provide that person’s contact information.
Create Corporate Bylaws
These guidelines will determine how the owners and management of your organization do business going forward. You have full authority over them, but the formation of a company in certain jurisdictions is contingent on their having been filed beforehand. However, they are not obligatory in the state of Delaware. You will need to create a document outlining all of these rules to create corporate bylaws. Additionally, you will need to appoint officers such as a chairman and establish a system of checks and balances to ensure that no one person can have excessive power within the company. If a person has been found guilty of securities fraud within the last five years, they are ineligible for any position in your firm’s management team.
Issue Stock to Your Shareholders
Different from corporations, limited liability companies (LLCs) need fewer formalities. No stock certificates exist, for instance. Directors may be elected by the majority of shareholders anytime they see fit, and the company is not required to organize annual shareholder meetings or director elections. Because of these distinctions, forming an LLC is as simple as filing articles of organization with the state and does not need the services of an attorney. LLCs may be more adaptable than corporations while maintaining ease of operation. Members of a limited liability company (LLC) are not personally accountable for the debts of the firm, although shareholders in a corporation are individually entitled to a portion of the company’s revenues.
If you’re forming a Delaware corporation, you need to consider the legal ramifications of that decision immediately. One of the most important things to do is to consider forming a Delaware corporation. Forming a corporation can be confusing, but with proper guidance, it doesn’t have to be. Contact the Corporation Center at (800) 580-4870 for more.