Guide on Forming A New Business Entity
Over half a million companies, including half of all publicly listed companies in America, almost two-thirds of Fortune 500 companies, and many tech startups are incorporated in Delaware. The U.S. Chamber Institute for Legal Reform has named Delaware the best jurisdiction for corporations in the United States for 10 straight years. This article will go through how you can form a new business entity with the Delaware Division of Corporations.
Determine the Business Entity Type You Want
The first thing to do is determine the kind of business entity you would like to create. You should seek advice from a lawyer or a certified public accountant (CPA) if you are confused about the benefits and disadvantages and rights and obligations of the different business entities offered in Delaware. Delaware’s Division of Revenue outlines the various business entities on offer through a Legal Business Structure Table. It explains the process of setting up each business entity type through a Registration Process Flow Chart.
If your business entity is a corporation, general partnership, limited liability company (LLC), limited partnership (LP), public benefit corporation effective 1 August 2013, or statutory trust, you are obliged to file your business with Delaware’s Division of Corporations.
Sole proprietorships, on the other hand, do not file with the Division of Corporations.
Unincorporated not-for-profit associations and partnerships may make specific filings with the Division of Corporations.
If your business will have any economic activity in the state or seek to hire people there, you should visit Delaware’s One Stop Business Registration and Licensing System.
Get a Registered Agent
Having done the above, you are required by state law to have a Registered Agent for the entirety of your business’ life. The Registered Agent may be a person resident in the State or a business authorized to operate. They should have a physical address in the state. You can consult this list of Registered Agents to find an agent suitable for you.
If, however, your business will have a physical presence in the state, you can serve as your own Registered Agent.
Reserve Your Business Name
You may reserve your preferred business name online with the Division of Corporations for 120 days for $75. This is entirely optional. Payment can be made using American Express, Discover, MasterCard, or VISA. You should print a copy of the confirmation page after you have registered. This and all transactions conducted on the website are non-refundable. If you prefer, you may reserve your preferred business name in writing.
Get a Certificate of Incorporation/Formation
Download sample application forms and a statement of fees. When you have filled in the PDF forms, you can upload them to the website or send them by mail. If you choose to use mail, you must attach a cover letter with your business’ name, phone number, and return address.
Submit Your Application
You may upload your completed application or send it by mail to the Division of Corporations at the following address:
John G. Townsend Building
401 Federal Street
Dover, DE 19901.
Now you can enjoy some of the many benefits that Delaware companies enjoy.