Delaware calls the document most people search for as “Articles of Incorporation” a Certificate of Incorporation, and filing it with the Delaware Division of Corporations is what legally creates your corporation. The base filing fee is $89 for a one-page document. The certificate itself has to contain four specific items: a corporate name, a Delaware registered agent, a business purpose, and your stock structure. Everything else is optional, and the choices you make inside those four items shape your franchise tax, your governance, and whether your filing clears on the first pass.
The Four Required Elements
Delaware’s General Corporation Law requires every certificate to include four things.1Delaware Code Online. Delaware Code Title 8 – General Corporation Law – Section 102
- Corporate name. Must be distinguishable from every other entity on file and must include an approved designator such as Corporation, Incorporated, Company, Limited, Inc., or Corp.
- Registered agent and office. The name of a Delaware registered agent and a physical street address in the state.
- Business purpose. Delaware allows a broad statement that the corporation may engage in any lawful business activity, and most filers use exactly that language.
- Stock information. The total number of shares the corporation is authorized to issue, and either a stated par value per share or a declaration that the shares have no par value. If you create more than one class of stock, you must spell out the rights and limitations of each class.
That is the full mandatory list. You can add optional provisions limiting director liability, granting the board power to adopt bylaws, or restricting specific corporate actions, and most incorporators include at least a few. None of them is required for the filing to be accepted.
One point of frequent confusion: the certificate does not need to state a corporate duration. Say nothing about it and Delaware presumes the corporation exists indefinitely. Address duration only if you want automatic dissolution after a set number of years.
Picking a Name That Will Clear
The name has to be distinguishable from every other entity already registered with the Division. If it is too close to an existing name, the filing is rejected. Run a preliminary search through the Division’s online database before you submit anything.
Acceptable designators include Corporation, Incorporated, Company, Association, Foundation, Institute, Limited, Fund, Club, Society, Union, Syndicate, and their standard abbreviations.1Delaware Code Online. Delaware Code Title 8 – General Corporation Law – Section 102 Words like “Bank” or “Insurance” can trigger additional regulatory approval before Delaware will accept the name.
If you’re not ready to file but want to hold a name, Delaware will reserve it for 120 days for $75.2Delaware Division of Corporations. Name Reservation Applications You can submit the reservation online or by mail. Reserving a name with the state is not the same as securing trademark rights.
Registered Agent
Every Delaware corporation needs a registered agent with a physical Delaware location. The agent accepts legal documents, including service of lawsuits, and forwards official state correspondence such as the annual franchise tax notice. P.O. boxes and virtual offices do not qualify.3Justia. Delaware Code 8 132 – Registered Agent in State; Resident Agent
The agent can be the corporation itself (if it maintains a Delaware office), a Delaware resident, or a business entity authorized to operate in the state. Most out-of-state incorporators hire a professional registered agent service, which typically runs $50 to $300 per year.
Keep this appointment current. A registered agent can resign by filing a certificate with the Secretary of State after giving the corporation at least 30 days’ written notice, and the resignation takes effect 30 days after that filing. If no replacement is appointed in time, Delaware forfeits the charter of a domestic corporation or revokes the authority of a foreign one, and service of process against the corporation starts going to the Secretary of State instead.4Justia. Delaware Code 8 136 – Resignation of Registered Agent Not Coupled With Appointment of Successor
Stock Structure Choices
Authorized shares are the ceiling on how many shares the corporation can ever issue. The corporation does not need to issue them all right away; unissued shares sit in reserve for later fundraising, employee stock options, or other uses. Delaware sets no minimum or maximum.
Each share either has a stated par value or carries none. Many Delaware corporations set par value at a fraction of a cent, often $0.0001 or $0.001. The reason is that par value feeds into the alternative franchise tax calculation and a low par value can produce a much smaller tax bill.
Delaware gives you wide freedom to create multiple classes and series of stock with customized rights.5Justia. Delaware Code 8 151 – Classes and Series of Stock; Redemption; Rights Common stock typically carries voting rights; preferred stock might carry priority dividends, liquidation preferences, or conversion rights. For any preferred class, the certificate or a board resolution must state the dividend rate, whether dividends are cumulative, and whether they take priority over other classes.
How Your Share Count Drives Franchise Tax
The authorized share count directly determines your annual franchise tax under the default Authorized Shares Method:
- 5,000 shares or fewer: $175 (minimum tax)
- 5,001 to 10,000 shares: $250
- Each additional 10,000 shares or fraction thereof: add $85
- Maximum tax: $200,000
The Assumed Par Value Capital Method is the alternative. You divide total gross assets by total issued shares to get an “assumed par,” then multiply through by authorized shares to find 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. For corporations that authorize millions of shares but hold modest assets, the Assumed Par Value method often saves thousands of dollars a year. Think through this trade-off before you lock in your share count and par value.
Who Signs and Files
Any person or entity can serve as the incorporator, regardless of residence or ownership stake.7Justia. Delaware Code 8 101 – Incorporators; How Corporation Formed; Purposes The incorporator signs and files the certificate. Attorneys and corporate service companies routinely act as incorporators for their clients.
The incorporator’s authority ends quickly. After filing, they hold an organizational meeting (or act by written consent) to adopt bylaws and elect the initial board, then step aside.8Justia. Delaware Code 8 108 – Organization Meeting of Incorporators or Directors Named in Certificate of Incorporation If initial directors are named in the certificate itself, those directors run the organizational meeting and the incorporator’s role ends at filing.
Filing: Where, How Much, How Long
The completed certificate goes to the Delaware Division of Corporations. You can file online, by mail, or in person, and notarization is not required.9Delaware Division of Corporations. How to Form a New Business Entity
The base fee of $89 bundles the filing fee, receiving and indexing fee, data entry fee, municipality fee, and county recording fee for a one-page document. Each additional page adds $9.10Delaware Department of State. Delaware Division of Corporations Fee Schedule Most straightforward filings fit on one or two pages and come in under $100.
Standard processing runs roughly three to five business days, though it fluctuates with volume. Expedited tiers are available for an extra fee:11Delaware 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 the Division rejects your filing, you’ll get a written explanation. The usual culprits are a name too close to an existing entity, missing stock details, or an ineligible registered agent. Revise and resubmit; Delaware does not charge a separate penalty, but you may have to pay the expedited fee a second time if you originally paid for one.
What You Still Have to Do After Filing
Filing the certificate creates the corporation as a legal entity. Several things have to happen next to make it operational.
The incorporator (or the initial directors, if named in the certificate) must hold an organizational meeting to adopt bylaws, elect any directors not already named, and appoint officers. Delaware permits action by written consent in place of a formal meeting, which is how most single-founder companies handle it.
Bylaws govern internal operations: how meetings are called, how votes are counted, what officers exist, how shares get transferred. The incorporators or initial directors adopt the first bylaws. Once the corporation has received payment for any of its stock, bylaw-amendment power shifts to the shareholders, though the certificate can also grant the board concurrent authority to amend.12Delaware Code Online. Delaware Code Title 8 – Section 109 Bylaws
Beyond bylaws, you need to get 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. If the corporation will do business in any state besides Delaware, it has to register as a foreign corporation in each of those states by 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. Most corporations formed in Delaware operate primarily elsewhere, so foreign qualification applies to the majority of filers.
Changing the Certificate Later
You can amend the certificate at any time to change the corporate name, adjust stock structure, alter the business purpose, or add new provisions. The board first adopts a resolution proposing the amendment, and in most cases a majority of voting shareholders then has to approve it.13Delaware Code Online. Delaware Code Title 8 – Section 242 Amendment of Certificate of Incorporation
The amendment is filed as a Certificate of Amendment. The statutory filing fee is $30 for amendments that do not increase authorized capital stock.14Justia. Delaware Code 8 391 – Amounts Payable to Secretary of State Amendments that increase authorized shares carry a higher fee calculated from the difference between the old and new share structures, and administrative charges for receiving, indexing, and county recording get added on top. Expedited processing is available at the same tiers as the original filing. Before filing a stock-related amendment, check your bylaws and any shareholder agreements for extra approval requirements or notice periods that go beyond the statutory minimum.
The Annual Obligation That Follows
Incorporating in Delaware creates an ongoing yearly obligation that catches some business owners off guard. Every Delaware corporation must file an annual franchise tax report and pay the tax by March 1.15Delaware Division of Corporations. Annual Report and Tax Information The annual report filing fee is $50 for standard corporations ($25 for exempt corporations). The franchise tax itself uses whichever of the two methods 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 risk having their charter voided. Reinstatement is possible but requires paying all back taxes, penalties, and interest.
Nonprofit corporations organized without capital stock may qualify as “exempt” if they meet criteria such as holding IRS 501(c) tax-exempt status or being organized exclusively for religious or charitable purposes.17Delaware Division of Corporations. Exempt Corporation Definition Exempt corporations still file an annual report but pay a reduced fee and owe no franchise tax.