To form a Delaware corporation, you file a Certificate of Incorporation with the Delaware Division of Corporations; this is the document most people mean when they search for Delaware articles of incorporation. The base filing fee is $89 for a one-page document, and filing it is what legally creates your corporation. The choices you write into that document, particularly around stock and par value, follow the company for the rest of its life, so it is worth understanding each piece before you submit anything.
What the Certificate Must Contain
Delaware’s General Corporation Law requires exactly four items in every Certificate of Incorporation:1Delaware Code Online. Delaware Code Title 8 – General Corporation Law – Section 102
- A corporate name that meets Delaware’s naming rules.
- The name and physical Delaware street address of a registered agent.
- A business purpose. Delaware permits a broad catch-all stating that the corporation may engage in any lawful business activity, and most filers use that language.
- Stock information: the total number of authorized shares and either the par value per share or a statement that shares have no par value. If there is more than one class of stock, the certificate must describe the rights and limitations of each.
Everything else is optional. You can add clauses limiting director liability, granting the board power to adopt bylaws, or restricting particular corporate actions, but the filing will not be rejected for leaving them out. One point that confuses new filers: you do not have to state a corporate duration. Say nothing and Delaware presumes the corporation exists indefinitely.
The incorporator, meaning the person or entity that signs and files the document, can be anyone. There is no residency requirement and no ownership stake required.2Justia. Delaware Code 8 101 – Incorporators; How Corporation Formed; Purposes Attorneys and registered agent companies routinely act as incorporators for their clients.
Choosing the Corporate Name
Your name has to be distinguishable from every entity already on file with the Division of Corporations. If it is too close to an existing name, the Division will reject the filing. Running a preliminary search through the Division’s online database before you submit avoids this.
The name must also include one of Delaware’s accepted corporate designators: Corporation, Incorporated, Company, Association, Foundation, Institute, Limited, Fund, Club, Society, Union, Syndicate, or abbreviations such as Inc. and Corp. Certain regulated words like Bank or Insurance can trigger additional approval requirements.
If you are not ready to file but want to hold a name, Delaware allows a 120-day reservation for $75, filed online or by mail.3Delaware Division of Corporations. Name Reservation Applications A state name reservation is not a trademark. Before you commit to signage and marketing, check the U.S. Patent and Trademark Office database separately.
The Registered Agent
Every Delaware corporation must have a registered agent with a physical location in Delaware. The agent accepts legal documents, including service of lawsuits, and forwards official correspondence like the annual franchise tax notice. Virtual offices and P.O. boxes do not qualify.4Justia. Delaware Code 8 132 – Registered Agent in State; Resident Agent
The agent can be the corporation itself (if it keeps a Delaware office), an individual Delaware resident, or a business entity authorized to operate in the state. Out-of-state incorporators generally hire a commercial registered agent service, which typically costs $50 to $300 per year.
Keep the agent relationship current. A registered agent may resign by filing with the Secretary of State after giving the corporation at least 30 days’ written notice, and the resignation takes effect 30 days after the filing. If no replacement is on file by then, Delaware will forfeit a domestic corporation’s charter or revoke a foreign corporation’s authority to do business, and legal process gets served on the Secretary of State instead.5Justia. Delaware Code 8 136 – Resignation of Registered Agent Not Coupled With Appointment of Successor
Authorized Shares and Par Value
The certificate states the total number of shares the corporation is authorized to issue. Authorized shares are a ceiling, not a floor; you can hold unissued shares in reserve for future fundraising or employee stock options. Delaware sets no minimum or maximum.
Each share carries either a stated par value or a declaration of no par value. Many Delaware corporations set par value at a fraction of a cent, often $0.0001 or $0.001. The reason is tax. Delaware’s default annual franchise tax calculation, the Authorized Shares Method, is based purely on how many shares you authorize:
- 5,000 shares or fewer: $175 (the minimum tax)
- 5,001 to 10,000 shares: $250
- Each additional 10,000 shares or fraction: add $85
- Maximum tax: $200,000
The alternative, the Assumed Par Value Capital Method, factors in issued shares and total gross assets. You divide gross assets by issued shares to get an assumed par, then multiply through by authorized shares to reach the taxable capital base. The rate is $400 per million dollars of assumed par value capital, with a $400 minimum.6Delaware Division of Corporations. How to Calculate Franchise Taxes Delaware lets you pay whichever method produces the lower amount, so a low par value paired with a large authorized share count often produces a much smaller bill under the second method than the first. Think this through before you pick numbers.
If you authorize more than one class of stock, the certificate must spell out voting powers, dividend rights, and restrictions for each class.7Justia. Delaware Code 8 151 – Classes and Series of Stock; Redemption; Rights Venture-backed startups commonly authorize a block of common stock alongside “blank check” preferred stock, letting the board set specific preferred terms later during a funding round.
How to File and What It Costs
The completed certificate goes to the Delaware Division of Corporations. You can file online, by mail, or in person.8Delaware Division of Corporations. How to Form a New Business Entity Notarization is not required.
The $89 base fee covers a one-page document and bundles together the filing fee, receiving and indexing fee, data entry fee, municipality fee, and county recording fee. Each additional page adds $9.9Delaware Department of State. Delaware Division of Corporations Fee Schedule Most straightforward certificates fit on one or two pages.
Standard processing without an expedited fee generally runs three to five business days. If you need it faster, Delaware offers tiered expedited service:10Delaware Division of Corporations. Expedited Services
- Next business day: $50 to $100
- Same day: $100 to $200 (received by 2:00 p.m. EST)
- Two-hour service: $500 (received by 7:00 p.m. EST)
- One-hour service: $1,000 (received by 9:00 p.m. EST)
If Your Filing Is Rejected
A rejection comes with a written explanation. Common reasons are a name too similar to an existing entity, missing stock information, or an ineligible registered agent. Delaware does not charge a resubmission penalty, but if you originally paid for expedited processing, expect to pay that fee again on the corrected filing.
Amending the Certificate Later
Corporations can amend the certificate at any time to change the name, restructure stock, revise the purpose clause, or add new provisions. The board first adopts a resolution proposing the amendment, and in most cases a majority of voting shareholders must then approve it.11Delaware Code Online. Delaware Code Title 8 – Section 242 Amendment of Certificate of Incorporation
You file a Certificate of Amendment with the Division of Corporations. The statutory filing fee is $30 for amendments that do not increase authorized capital stock.12Justia. Delaware Code 8 391 – Amounts Payable to Secretary of State Amendments that increase authorized shares carry a higher fee tied to the difference between old and new share structures, with administrative charges added on top. Before filing anything stock-related, check your bylaws and any shareholder agreements for approval requirements or notice periods that go beyond the statute.
What Happens After You File
Filing creates the corporation as a legal entity. Several things still need to happen to make it operational.
The incorporator, or the initial directors if they were named in the certificate, holds an organizational meeting to adopt bylaws, elect directors, and appoint officers.13Justia. Delaware Code 8 108 – Organization Meeting of Incorporators or Directors Named in Certificate of Incorporation Delaware allows action by written consent, which is how most single-founder companies handle it. Bylaws cover the internal operating rules: how meetings are called, how votes are counted, what officers exist, and how shares transfer. The power to adopt initial bylaws sits with the incorporator or initial directors; after the corporation has received payment for any stock, that power shifts to the shareholders, though the certificate can also give the board concurrent authority to amend.14Delaware Code Online. Delaware Code Title 8 – Section 109 Bylaws
You will also need to obtain a federal Employer Identification Number from the IRS, issue stock certificates or record uncertificated shares in a stock ledger, and open a corporate bank account. Most Delaware corporations operate primarily somewhere else. If yours does, you will need to register as a foreign corporation in each state where you actually do business, which means filing for a certificate of authority and paying that state’s fee. Failing to register can bar the corporation from filing lawsuits in that state’s courts until it qualifies.
The Annual Obligation
Incorporating in Delaware creates a recurring annual duty that surprises some owners. Every Delaware corporation must file an annual franchise tax report and pay the tax by March 1 each year.15Delaware Division of Corporations. Annual Report and Tax Information The annual report filing fee is $50 for standard corporations, and the franchise tax is calculated using whichever of the two methods described above produces the lower amount.
Missing March 1 triggers a $200 penalty plus 1.5% monthly interest on any unpaid balance.16Division of Revenue – State of Delaware. Franchise Taxes Corporations that stay delinquent long enough can have their charters voided. Reinstatement is available, but it means paying all back taxes, penalties, and interest, so keeping up is far cheaper than catching up.
Certain nonprofits organized without capital stock may qualify as exempt corporations, which still file an annual report but at a reduced $25 fee and owe no franchise tax.17Delaware Division of Corporations. Exempt Corporation Definition