C-Corp Formation In Delaware

C-Corp Formation In Delaware
Every one of us wants the best when it comes to choosing business running growth. You all will think that choosing the best business structure is the only thing to get bogged down in but there is much more to this. Choosing the right state for incorporating a business can impact the potential growth in general. However, making these decisions might not be as tough as expected. Every corporation’s goal must be to minimize personal liability and improve credibility for attracting potential customers. Well, this is a key step so far. 

In this guide, you will receive a credible source of information for choosing a Corporation expansion in Delaware. Let’s call it C-Corp Delaware which provides a good basis for your technology startup and legal entity structure. Most of the entrepreneurs when entering the US, pick Delaware. Why? Here is everything compiled for you!

Why Choose C-Corp Delaware?

The state is simply known as ‘corporation state’ and this much weighs down to the fact that why you choose Delaware. Since the 19th century, Delaware has been known for its steady legal structure and laws for uprising the C-Corps. Along with modified corporate laws, the state provides a business-friendly environment to C-Corps. The reason why companies turn highly towards Delaware is because of quality, consistency, stability, and predictability.

Let’s talk about the Delaware laws first! The Delaware laws specifically focus on the internal operations of your C-Corp. The laws govern the C-Corp behavior which will typically illustrate how your company operates within Delaware. Moreover, the focus of the Delaware law will always be on your C-Corp management and investment. Delaware designs laws for C-Corps to choose the operating procedures that are in their favor. There is great deference for the company’s board of directors and bylaws. If C-Corps complies with these rules and regulations, this will protect investors. There is also a separate court established in Delaware for C-Corporations. The courts, such as the Court of Chancery, are bound to hear only the cases involving corporate laws. The judges are also experienced in corporate law and support credibility regarding corporate judicial decisions. 

Other than corporate laws, Delaware offers a direct direction for issuing shares. The businessmen can raise venture capital this way. The corporate tax system is respected, friendly, and well-established. The state also supports the large C-Corps with thousands of stockholders. The state statutes are also highly flexible for C-Corps. Living physically in the state is optional to run a business. So, officers, shareholders, and directors can operate it from outside. They can locate their headquarters in any other state if they want. Delaware gives that option too. Most of the venture capital investors are attracted to the C-Corps formed in Delaware. Thus, it is also considered as a tax-advantaged location. Last, but not least, C-Corps can choose to disclose the identity of directors and officers because of light taxation and business-friendly usury laws of Delaware. 

How To Form A C-Corp In Delaware?

If you’re clear about your short-, medium–, and long-term goals, then you can decide to incorporate as C-Corp Delaware.  The goals simply include your business potential, business credit, and the exit strategy in general. The most important is if you’re concerned about raising venture capital then you can start the process but there is a vital step to follow before starting it legally. 

The Delaware state provides all the details but some steps listed below are must to follow. 

Consult Legal Experts 

This must be considered as a vital step for deciding over the key strategies of C-Corp formation in Delaware. The process is simple. Sometimes you don’t actually need to hire a lawyer in Delaware But you must understand the system very well. The Delaware corporation laws must be discussed with an expert as it is important to form a corporation in Delaware. These Delaware laws are helpful to your business and it is foolish to not seek advice.  Key decisions about the issuance of shares, the composition of the board, the allocation of powers, and the capital structure of the firm must be made early. If you fail to address these issues, it can cause an economic loss and later litigation. 

There are numerous benefits for you working with legal and tax advisors. First, you can understand all the requirements. Many businessmen found it helpful to know their tax and compliance responsibilities ahead of time. You can also arrange a budget and take initiatives accordingly. Remember, Delaware laws are designed to provide stockholders and corporations the maximum flexibility in their operations. If businesses understand the conditions well, they can take advantage of a variety of optional provisions for their Delaware C-Corps. Thus, the right consultancy can sort out multiple things ahead of time. 

Unlike other US states, Delaware is a low-cost provider to C-Corps. It provides durable value to businessmen through efficient and predictable law inclusion. You can lose these benefits if you don’t invest in prudent planning from the start. There are advantages along with limitations for specific situations. Therefore, you should seek the help of a competent advisor who could best fit your business objectives and needs. 

Choose A Registered Delaware Agent 

A registered agent is a person or business available during regular business hours to receive legal documents on behalf of a corporation or any other legal entity. According to Delaware law, you require a registered agent for your C-Corp. The legal documents could be any such as any official communication or summon by the state. This registered agent comes with some compliances too. The agent must have a street address where documents can be delivered. The information provided by the agent must be on a public record. Moreover, Delaware requires C-Corps to provide and maintain the name, business telephone number, and business address of a communication contact. The contact could be an officer, partner., employee, or company’s authorized agent to receive communications from the registered agent. The information held by the agent is not public but it can be used by the subpoena. Delaware doesn’t entertain or charter secret communications with no human faces accountable for all the activities. 

However, the corporations located physically within Delaware may act as their registered agent. Most corporations like to hire these agents as a third party and get their jobs done. In both ways, the process of getting a registered agent can be critical. You need to fill out all your documents in advance and then contact these agents directly. Corporations in Delaware must select an agent with expertise and conduct due diligence according to the requirements of business formation in Delaware. The agents must also be able to assist the corporation in any business meeting or in other jurisdictions where corporations conduct their activities.

Reserve Name For Your C-Corp Delaware 

This is a mere step where you have to name your C-Corp for incorporation in Delaware. The C-Corps in Delaware maintain certain standards for names. The name of every C-Corp is unique and you have to maintain it for your C-Corp. It shouldn’t be matched with any other corporation in the state. You can also check the uniqueness of your C-Corp name by searching online. If an idea pops up in your mind regarding the name, you can also reserve it even before finishing the incorporation process. You can find all the details on the Delaware Corporation website. 

Your C-Corporation must end with a corporate designator such as ‘limited’, ‘Corporation’, or ‘incorporated’ or an abbreviation as well. Designators are in common use outside the premises of the US and there are some other acceptable designators too such as ‘S.A’ or ‘Gmbh’. The Delaware state has a right to cross-check the name and reject any if that is harmful or misleading. For example, the names containing words like ‘Trust’ or;’ Bank’ will be rejected without any regulatory inspection. The state division doesn’t accept offensive words. 

Complete C-Corp Delaware Certifications

The next step is to prepare a certificate of incorporation and file it with divisions of corporations. There are certain examples of certificates depending upon the choice of business entity. The examples are also available on their website. This certificate of incorporation includes the business entity name, address of the registered agent, and the signature and address of the authorized person. The authorized person is required to file the certificate. The complete information is public. Stock corporations must include several authorized shares as par value. You will receive a confirmation note once the division of the corporation approves the formation form or other documents. You can submit these documents using the online filing service of Delaware. You can also choose to send it by mail. You must file this certificate along with the cover letter. 

Maintain C-Corp Delaware 

It’s quite obvious that you need to maintain the corporation after forming it. This maintenance requires a filing of certain ongoing requirements along with good standing with the state. You can obtain the certificate of this from the state. For this purpose, you must be required to work with certain financial institutions. The good standing certificate also includes an annual report filing and paid franchise taxes. The whole process can also be initiated online. You can then appoint the initial board of directors of the C-Corp and then issue stock to shareholders. You can also apply for an EIN from the IRS meanwhile. 

Read an article on how to get an EIN from the IRS in the US!

There are some other important liabilities that one must consider. Remember! The act of incorporating is not a license to conduct business in Delaware or elsewhere. A corporation is always responsible for securing regulatory approval and appropriate licenses in the jurisdictions in which it operates the business. 

Bottom Line 

As it is described, the filing process of C-Corp Delaware is not that complicated. You can get access to everything available on their website. The documents are also available there. The whole process is designed efficiently with great flexibility and all by the best needs of your business. But this doesn’t mean that you do not pay extra attention to the actual filing process. If you plan about the process, documentation, capital structure issues, and key governance, seek the legal advisor’s help and do not take any shortcuts. These shortcuts could lead you in the long haul. 

Form A C-Corp Delaware With The FastCorpUSa

FastCorpUSA now allows you to incorporate as a Delaware C-Corporation with a few clicks. You can automatically setup your plan and update it once you incorporated it. Our legal experts are always ready to serve you with their best and unlimited possibilities. 

Learn more about our services we provide in Delaware state by sending your query at info@fastcorpusa.com

Author

  • Yusra Abid

    Yusra Abid writes SEO articles for businesses that want to see their Google search rankings grow. She has been working with writing challenged clients for over four years. She provides copywriting, ghost writing, coaching and blogpost services. Her educational background in Literature has given her a broad base from which to approach many topics. She enjoys preparing content for individuals who are facing challenges in professional dialects.

About Fastcorp USA

Founded in 2012, FastCorpUSA is the largest company service providers for international entrepreneurs planning to set up bases in the United States. We help overseas entrepreneurs navigate the webs of governmental paperwork and ensure all members companies are compliant to the US laws.

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