Step 1) Verify & Secure Your Brand Name
Choosing the perfect name for your entity is the very first step toward forming your Delaware corporation. Delaware requires your brand name to:
- Be distinguishable from any existing business in Delaware. You can run a name check on Delaware’s state website to see if your ideal name is available.
- Be free of any restricting wording, including “bank”, “university”, “college” or “trust”.
- Contain the word “corporation”, “company”, “limited”, “incorporated”, or an abbreviation of one of these.
While this step involves legal requirements, choosing a memorable name is extremely important for branding, too.
What To Do:
First things first, you’ll want to run a business name search on Delaware’s state website and see if your ideal name is up for grabs.
If it’s already taken, you’ll need to make your name distinguishable from the existing business or consider rethinking your name altogether. Once you settle on an available name, you have the option to reserve it for $25.00, but this is by no means required in Delaware.
While you're at it, you might want to search GoDaddy at this time to see if there’s a good domain name available for purchase. It’s extremely helpful for brand visibility to have a website that’s easy to find. If there’s a decent domain name available, we recommend securing it now, even if you’re not planning on building a website right away.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use WEEBLY to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Appoint A Registered Agent
In order to move along with the incorporation process, you need to choose someone to act as your registered agent.
Your Delaware registered agent may be a resident of the state or a company that’s authorized to represent businesses in the state. They’ll be responsible for accepting tax forms, service of process notices and other legal documents on behalf of your corporation.
Legally, Delaware does allow business owners to act as their own registered agents, but we encourage you to consider appointing a third-party professional. If you act as your own, you’ll have to:
- Maintain normal (M-F, 9-5) business hours at your home or business address.
- Publically link your home address to your business (if you work from home).
- Risk being served in front of customers, friends or family members.
- Sort your mail very carefully and open it promptly to avoid missing any important deadlines.
Again, it’s totally legal to sign yourself up, but be aware that it’s a considerable commitment.
What To Do:
Check out our registered agent guide if you’re thinking about taking on this task yourself, or handing over the reins to a business partner. If you decide that it’s compatible with your lifestyle, go ahead and sign yourself up on your Certificate of Incorporation.
But if that doesn’t sound all that appealing, I recommend that you check out IncFile’s registered agent services. They’re an online incorporation provider that offers a free year of registered agent services when you form your corporation with them, which is a pretty great bargain.
Step 3) File Certificate Of Incorporation
Filing your Certificate of Incorporation is a significant step for your business. After this, you’ll be a proper Delaware corporation! This document will ask for:
- A cover letter with your name, address and phone/fax number
- The name and purpose of your corporation
- The name and physical/mailing address of your Delaware registered agent
- The amount of stock your business is authorized to issue and the value per share
- The name and mailing address of the incorporator
The Certificate of Incorporation is fillable and available to download through the Delaware state website. Once you fill out all of the required fields, print it out, attach the $89 filing fee and mail it to the following address:
Division of Corporations
John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901.
Fax: (302) 739-3812
What To Do:
While you have the option to use the DIY approach above, our belief is that it’s best to delegate this task to a professional. Using an online incorporation service is a hassle-free way to incorporate in Delaware, and as we mentioned, even get free registered agent services!
Step 4) Obtain EIN
Now it’s time to obtain an EIN, or Employer Identification Number. Think of your EIN as a corporate social security number. The federal government tracks your business’ financial activity by using your EIN, and it’ll be necessary for pretty much every major move you make from here on out.
One of the key reasons to get an EIN early on is the ability to open a business bank account. Unlike a personal bank account (for which you’d provide your social security number), a business bank account requires your EIN.
What To Do:
The cheapest and most efficient way to obtain an EIN is through the IRS website. Their free online application allows you to get your identification number as soon as you’re done filling it out. That said, there are other ways to get an EIN for free. Have a quick look through our EIN guide to find out about other approaches.
Step 5) Meet With Directors & Establish Bylaws
The state of Delaware only requires corporations to have a minimum of one director on their boards. Regardless of how many directors you appoint, though, this is the time when you’ll get together with them and conduct an organizational meeting. During this meeting, you should plan to:
- Discuss and establish corporate bylaws
- Issue shares of stock
- Appoint corporate officers
- Establish the corporation’s fiscal year
- Write a banking resolution
- Record your first meeting minutes
You should also plan on taking care of any additional logistical needs at this time. This is a critical moment for your business, so it’s crucial that you come into this meeting well-prepared and with a solid idea of what needs to be accomplish.
What To Do:
One of the best ways to prepare for your organizational meeting is to do a little research on meeting minute and bylaw templates. Some companies offer free versions of their templates, which is a great way to familiarize yourself if you’re new to this part of the business world.
Keep in mind that if you’re ever concerned about meeting all of Delaware’s corporate requirements, you can always browse through their corporation statutes for all the nitty-gritty details!
Step 6) Start A Corporate Records Book
At this point, you’ll have accumulated quite a few pieces of important documentation, so it’s a good time to start a corporate records book. This is exactly what it sounds like: an organizational tool to keep all of your business records in one place. This will include things like your:
- Certificate of Incorporation
- Licenses and permits
- Corporate bylaws
- Meeting minutes
- Banking resolution
A corporate records book can take a variety of forms. Depending on your preferences, you can either opt for a simple binder or choose to invest in a full-on corporate kit. Corporate kits typically include custom pieces like an embossing seal, stock certificates, printed meeting minutes and bylaws, and a professional leather binder with your company’s name engraved in it.
What To Do:
Investing in a corporate kit is a great way to demonstrate your company’s legitimacy. They’re often included in higher-tiered online incorporation packages, so it’s worth checking out your provider’s rates for these.
If you’re not looking for customized pieces and would prefer a simple binder, you could easily find one at your local office supply store. The most important thing here is to keep everything organized!
Step 7) Open A Business Bank Account
Opening up a business bank account is a crucial step, and one that must be done before making any big financial moves. There’s no room to mix your personal and professional expenses here.
Ideally you’ll decide on a bank during your organizational meeting, hopefully considering:
- Local banks, like WSFS or Artisans Bank
- Delaware credit unions, like Wilmington Trust
- National banks, like Chase or Bank of America
Each of these options has its own set of advantages, so I highly recommend doing some in-depth research before deciding on a bank. That said, it’s also important to be proactive about this process so you can start managing your business finances as soon as possible.
What To Do:
Do your research on some local banks and credit unions. Make some calls and find out where your top options fall when it comes to customer service, ATM accessibility, minimum account balances, or whatever features are your priorities. It’s also definitely worth considering using a national bank, so check out our top business banks accounts for a look at our favorite options.
Once you’ve opened up your bank account, you’ll want to sync it with some accounting software so you can start monitoring your financials. If you haven’t hired an accountant yet, this step is even more important. We’ve ranked our favorite accounting software tools to help you choose a program that will suit your needs.
Step 8) Handle Taxes & Licensing Requirements
The last step you’ll want to take care of is acquiring any necessary permits/licenses and addressing any special taxes. This will involve a bit of research on federal, state and local requirements, so here’s a quick roundup of some of the best resources for each:
- Federal: You can find lots of information on federal licenses and permits on the Small Business Association website. As far as federal taxes go, the business taxes page on the IRS website is a great resource.
- State: The Delaware state website has all the links you’ll need to acquire or renew a general business. Keep in mind that depending on your industry, you may need to obtain other permits/licenses or pay special taxes. Click around on the Delaware Department of Finance page to learn more.
- Local: To make sure you don’t overlook any city or borough-specific requirements, give your local Chamber of Commerce a call or visit.
What To Do:
If you’re going to require an array of different permits and licenses to legally conduct business in Delaware, you might consider hiring a business license service to help you out. These companies will take care of all the research for you -- all you’ll need to do is fill out the paperwork they send to your door (or inbox).
Need Help Incorporating?
Starting a corporation is definitely a labor of love, but it’ll be well worth it in the end.
If you need some help incorporating in Delaware, there are a handful of ways to lighten your load during this process. We’ve discussed quite a few services throughout the course of this guide, but here are the three we recommend most:
– IncFile ($49 + state fees) = Best Price & Overall Value
– LegalZoom ($149 + state fees) = Most Popular Service
– Harbor Compliance ($499 + state fees) = Better Customer Service