Thu 17 Mar 2016 | By:

Why You Should Incorporate in Delaware: 5 Solid Reasons

Why Incorporate a Business

Starting a business in Delaware or in any state is quite challenging; you’ll begin to realize that it’s not what you thought it would be. Probably, you were thinking that the process is easy, however, it’s the complete opposite.

You need to prepare a lot of documents, go through different requirements and read and understand different legal procedures. With this, you need to extend your patience and prepare yourself physically, mentally, emotionally and financially.

Before you run out of energy, it’s best that we start discussing one of the most important steps in the startup process – incorporation. By now, you may have heard about the term, but you don’t fully understand why you need to incorporate your business.

In this article, I’m going to give you 5 essential reasons why incorporation is necessary for your Delaware small business. After discussing all that, I will then introduce you to 3 credible and excellent resources to assist you as you incorporate your Delaware startup. Let’s start!

Quick Note: If you decide to incorporate in Delaware and want professionals to handle all legal paperwork, look into IncFile (for $49) or LegalZoom (for $149)Both are excellent services and have started over 50,000 businesses like yours.

1) Prevents Conflict With Other Founders/Partners

The problem with multi-owned businesses is, at some point, there will always be that triggering factor that will result into conflicts. Some businesses may survive this unstable phase while others won’t. Issues ranging from power struggle to fair equity division to personal conflicts are common among multi-owned businesses.

If you want to deal with this huge possibility head on, you need to incorporate your Delaware small business. By doing this, you’ll be able to equally issue stocks to founders preventing misunderstandings or any other problems in the future.


2) Protects Business Owners From Liabilities

Running any kind of business will always have its corresponding risks and hazards. Liabilities is one of them, regardless if it’s personal, legal and financial. Customers, business partners or random people may sue you for unsatisfactory service, conflicts of interest and for many other reasons. Creditors may seek legal repercussions or request an asset search to seize your properties and other valuable assets.

Incorporating your small business is essential if you want to protect you and your business. When you incorporate, you build your business as a separate and independent entity with its own rights and transactions.

Thus, you are not accountable for the transactions of your business and you will be absolved from any responsibility. In the same way, your small business will have the right to defend itself in court, having its own rights means that it will also be subject to due process.


3) Easier To Look For Financing

No investor will invest in any venture unless it is incorporated. For the majority of financial institutions and investors, having an entity is a must because it is a security blanket that will give them assurance. Venture capitalists prefer to invest in incorporated businesses because they have the ability to issue stocks which is quite the advantage. Looking for financing is difficult, especially since you’re a startup; so it would be best to incorporate to make everything a lot easier.

Even if you’re not looking for funding, incorporating your business can still be highly beneficial. Depending on the structure that you choose for your business, each have their own implications and risks; however, in the totality of things, incorporating your business will prove to be an advantage in the long run.


4) Builds Perpetual Existence

Perpetual Existence is the ability of a business to continue its operations even if it has outlived its founders/owners or is subject to current unfavorable circumstances such as the transfer or withdrawal of shares/stocks by one or several business owners.

Ensuring the lifetime existence of a business is important to entrepreneurs who started their business from scratch and have brought their business to phenomenal success. Sometimes, it’s not all about the money anymore, it’s about keeping the company alive, passing the legacy of the founder and the message and services of the business from one generation to the other.

If you want to do this with your Delaware startup as well, then you have to incorporate now. It’s one way to ensure that your business stays standing and strong despite all the hurdles it will face in the future.


5) Establishes Business Credibility

Business credibility is one of the best things that a company can have, but also the most difficult to obtain. During the initial stages of your Delaware small business, it will be difficult to establish business credibility and even in the next few years it will still be a struggle to build this. However, if you want that added boost, you can incorporate your business.

Beyond the abbreviation or initials after your business name that you get when you incorporate your business, you’ll have the confidence to operate because you are legally recognized by the state to conduct business. Your customers will also see this and they’ll trust and rely on you more. Credibility and a good reputation are the true ingredients to success.


3 Resources for Incorporating a Business in Delaware

Startup Tools and ResourcesIncorporating a business in Delaware requires hard work, patience and resources. You need to have a basic understanding of the process if you plan to do it yourself.

For this, you have to research and do a little studying; however, you don’t have to worry because regardless of whether you’re trying to form an LLC or Corporation, there are available guides to walk you through the steps.

In the process of understanding the incorporation process, if you feel like you’re not confident enough or you don’t want to commit mistakes, you can always ask for assistance from online incorporation services. LegalZoom, is a one-of-a-kind online incorporation service but there are many more options available:

1) IncFile: $49

IncFile ReviewBest known for being one of the most affordable at $49, IncFile has cemented its place in the industry as an online incorporation service that does not only offer the best pricing, but also the best quality service.

With services like one-on-one consultations, a free registered agent for one year, one business day preparation and many more, you’ll be able to start your business in no time. Plus, they also offer free shipping on all orders, you can read the review for more info!

2) CorpNet: $79

CorpNet ReviewFounded by Nellie Akalp in 2009, CorpNet has assisted thousands of small businesses incorporate their startups. With an A+ BBB rating on its belt, CorpNet is considered one of the most outstanding online incorporation services in the market.

It has a Business Structure Wizard that will assist you in choosing the legal structure of your Delaware startup; the company also offers free business consultations, free trademark search and free business name search. You can read the review for more info!

3) BizFilings: $99

BizFilings ReviewStarted in 1996, BizFilings has over a decade of experience in the online incorporation industry. It’s one of the most trusted companies when it comes to incorporation and for many years, it has continually developed new ways to make the lives of entrepreneurs easier.

Some of its note-worthy services include the BizComply, a 24/7 business monitoring tool and document library, free business name verification tool, 24-hour document preparation and filing and a lot more. You can read the review for more info!

Although most online incorporation services seem to have more or less the same features and tools, they actually have major differences when it comes to their services. IncFile may offer a free registered agent service valued at $150 for one full year while CorpNet and BizFilings may not. These two other online incorporation providers do have this service as well; however, it’s not free, you have to pay for the service.

CorpNet on the other hand offers free trademark, free business name searches and a lot more that are not on IncFile, so online incorporation services basically work this way. These are just simple examples that will help you determine which incorporation service is the best for you. IncFile, CorpNet and Bizfilings are 3 of the best, there’s no questioning that.


Wrapping Up and Incorporating a Business in Delaware

Wrapping Up and Starting a BusinessUndeniably, incorporating your business can give you substantial advantages and benefits. Managing an incorporated Delaware business will protect you and your business legally, allow you to take advantage of tax benefits and give you peace of mind.

Incorporation should always be a top priority, and whether you want to handle the process on your own or use an online incorporation service is up to you. At the end of the day, it is the best interest of your Delaware small business that always matters. Good luck!

About Ryan James

Half hardworking hermit, half avid adventurer, Ryan founded Startup Savant to simplify entrepreneurship and pay it forward by donating a portion of all revenue to support children's education via