Starting a corporation in Delaware is a great idea for many business owners. With experts ready to help you through the process and the tax perks you can take advantage of, it makes sense for many companies to get their business set up in Delaware. However, before you get started, it’s a good idea to understand what you’re up against, so use this useful step-by-step guide to help you from start to finish.
Step 1: Name Your Business
Not the easiest task in the world for some, but naming your business is the clear first step. After all, you’ll need the name of your company to complete the necessary paperwork to incorporate it in Delaware. Make sure you do a name check so that you aren’t using the same name as another company. Delaware has a list of guidelines that direct how to choose your company’s name, so make sure you consult that as well.
Step 2: Choose Directors
In Delaware, incorporating a business requires you to have at least one director. There are no age requirements for appointing a director and they do not have to live in Delaware or list their names and addresses.
Step 3: Find a Registered Agent
In the state of Delaware, you must use a registered agent when you incorporate your business. This person will help you fill out the proper documents and file them in the state. Your agent can also process vital tax information and other paperwork associated with running your business. This agent must be in Delaware, even if you reside elsewhere. If you incorporate in Delaware, you’ll also be required to maintain a registered agent with a physical address in the state. This does not include a P.O. box.
Step 4: File the Paperwork
Next, you’ll need to file a Certificate of Incorporation with the Department of State. Your agent will help you through this process.
Step 5: Keep Track of Tax Requirements
One of the reasons why Delaware is a popular place to incorporate is because of the tax benefits. While you don’t have to pay sales tax, you will be responsible for franchise tax. The annual report is due every March 1 and the tax is calculated based on the number of shares in the company and their par value.
Step 6: Get All Necessary Licenses
Most businesses require some type of license to operate so you’ll need to obtain the one that correlates with your company. This may be required at both the state and federal level and you could face legal repercussions if you fail to produce proof that you are licensed to operate. You’ll also need to get a tax ID number and an IRS identification number.
Following these steps ensures that starting a corporation in Delaware goes smoothly and ticks all the boxes in the process. Here at Corporation Center, we can help you each step of the way. We provide easy-to-assimilate advice on how best to proceed and the documentation to do so. Contact us today to get started.
