Why form a Delaware Corporation?
Business people eager to set up corporation in Delaware do so not for one single reason. They do so because Delaware is one of the most business friendly states in the country. The Delaware General Corporation Law is the most comprehensive and advanced business formation statute in the nation. The advantages of all that Delaware has to offer its corporation makes it the preferred state to file in. In fact a large percentage of the Fortune 500 companies incorporate in Delaware.
Limiting your Personal Liability by Forming a Delaware Corporation
Starting a corporation in Delaware will create a separate legal business entity - separate from the owners. Therefore, if the Delaware Corporation is named in a lawsuit, there are legal provisions and Delaware Code to protect the owners, directors, shareholders, and employees from personal liability.
Tips on naming your Delaware Corporation
A Delaware corporation, which shall contain one of the words "association," "company," "corporation," "club," "foundation," "fund," "incorporated," "institute," "society," "union," "syndicate," or "limited, or abbreviation thereof. The Delaware corporation name must be distinguishable from any other name on record or reserved by a corporation, LLC or limited partnership. A simple change such as using spaces, capitals, or special characters does not provide any distinction from another entity. A Delaware corporation shall not contain the word “bank” without approval and supervision of the State Bank Commissioner of Delaware.
Corporate Annual Reports
Delaware Corporations are required to file an Annual Report, and these documents are forwarded to the listed Delaware Registered Agent on file with the Delaware Division of Corporations. A $25.00 fee is required to be included along with the completed annual report.
Delaware Certificate of Incorporation
The Articles of Incorporation for a Delaware Corporation must include; a non-conflicting name with the appropriate corporate name extension, a registered agent name and address within the state of Delaware, the purpose for which the corporation is to be organized, the number and par value of the initial shares of stock, the name and street address of the organizing incorporator, and the signature of the incorporator.
Delaware S-Corporation
Once new Delaware corporation has been registered with the Delaware Secretary of State, S-Corp status is obtained by filing IRS Form 2553 - Election by a Small Business Corporation. Not all corporations or share-holders can qualify for S-Corporation status.
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