Incorporation Questions: Delaware Corporation Filing & More

Is it better to incorporate in Delaware or Nevada? Are there any special requirements for selecting a corporate name? Is there a minimum amount of cash required? This is part 4 of 4 in our new series on incorporating.

Where should I incorporate?

It is not the purpose of this guide to provide legal or tax advice. Before deciding to form a corporation, you should consult with an attorney or an accountant to determine if a corporate structure is best for your business, and in which state to form your corporation. Some accountants and lawyers recommend forming a Delaware corporation in all cases. It is true that up until a few years ago, Delaware corporations did have significant tax and other advantages. This is no longer as true as it used to be. Nor may it be advantageous to form a corporation in Nevada, Wyoming or any other state in America if you do not conduct business there. The best advice may be to form a corporation in the state where you plan to conduct business. It will be far less complicated and more cost-effective in the long run. Listed below are some of the reasons why Delaware attracts both large and small businesses.

What are the advantages of a Delaware or Nevada corporation?

Anyone may form a corporation in Delaware without ever having to visit the state. Delaware has kept its fees low and is one of the friendliest states to corporations. Indeed, over 50% of all companies listed on the New York Stock Exchange are Delaware Corporations.

  • Names and addresses of initial directors need not be listed in public records.
  • The cost to form a Delaware corporation is among the lowest in the nation. The annual $50 Franchise Tax compares favorably with that of most other states.
  • Delaware maintains a separate court system for business, called the “Court of Chancery.” If legal matters arise involving a trial in Delaware, there is an established record of business decisions.
  • No minimum capital is required to organize the corporation and there is no need to have a bank account in Delaware. Just one person can hold all the offices of the corporation: President, Vice President, Secretary and Treasurer. There is no state corporate income tax on Delaware corporations that do not operate within the state.
  • Shares of stock owned by persons outside of Delaware are not subject to Delaware personal income tax.
  • There is no Delaware inheritance tax levied on stock held by non-residents.
  • A Delaware corporation can be formed quickly and easily by phone in as little as 5 minutes.

Nevada is becoming increasingly friendly to corporations with its privacy and liability protection status. Numerous companies are relocating their business entities to Nevada in order to receive the numerous tax benefits. Listed below are some of the reasons why Nevada is attracting more businesses each day:

  • No state corporate tax on profits
  • No state annual franchise tax
  • No personal income tax
  • Stockholders are not public record which permits complete anonymity
  • Just one person can hold all the offices of the corporation: President, Vice President, Secretary and Treasurer.
  • Stockholders, directors and officers need not be residents of Nevada
  • A Nevada corporation can be formed quickly and easily by phone in as little as 5 minutes.

Can my Delaware corporation do business in my home state and other states besides Delaware?

Yes. In fact, nearly half of the corporations listed on the New York Stock Exchange are Delaware corporations. Many of these corporations conduct business throughout the U.S. and abroad. They must, of course, conform to the laws of any jurisdiction they enter. Many states require that any foreign (out of state) corporation qualify to do business in their state. The Company Corporation can assist you in qualifying your corporation or LLC in any state you choose.

Are there any special requirements for selecting a corporate name?

Yes. The corporate name you choose must contain a valid corporate indicator for the state in which you are incorporating. Most every state will accept one of the following identifiers or a suitable abbreviation: Incorporated, Corporation, Company, or Limited. The regulations affecting corporations do vary from state to state. In addition, your corporate name must not match or be too similar to the name of an existing company registered in your desired state. The Company Corporation can assist you in determining an acceptable corporate indicator for your state.

How do I find out if my preferred corporate name is available?

This service is provided by The Company Corporation as part of your order. Corporate names for Delaware corporations can be searched and reserved within only a few moments and at no additional cost. Name availability checks in other states may be obtained within 24-48 hours for most states. Please note, many states require that your corporate name be unique and not deceptively similar to the name of an existing corporation in that state. For this and to ensure your filing is completed as quickly as possible, it is a good idea to submit at least one alternate name with your order.

Is there a minimum capital requirement to start a corporation?

In most states, the only capital required to start your corporation or LLC is the state filing fee. For instance, to form a Delaware corporation, you only need to pay the filing fees of $74 and The company Corporation service fees.

How many people do I need to incorporate?

Most states require there be at least one director for a corporation and two for an LLC, although the actual number varies from state to state.

How long will it take before my business is officially incorporated?

If you form a Delaware corporation with The Company Corporation, your new corporation will usually be filed within only a few hours of receipt of your order. Due to our nationwide network of offices, your corporate documents in most other states will be filed with the appropriate state agency within just 2-3 days. As soon as the official documents are released by the state, we forward them to you via your desired method of delivery.

When will I receive my corporate kit?

Your corporate kit will be shipped to you via express courier after official verification of filing has been returned by your state. This time frame varies from state to state, but in most cases, you will receive your corporate kit within 5-7 business days from the date of incorporation. Your copy of the filed Articles of Incorporation arrive separately.

When will I receive my Articles of Incorporation?

Your copy of the filed Articles of Incorporation will arrive separately from the corporate kit. Generally, we can file your Articles of Incorporation and have them in your hands in as little as 10 business days. Foreign business formations require a somewhat longer time to complete. If you select our Express service, within just 24 hours of receiving documentation from your state of incorporation we will send you the filed Articles of Incorporation and your selected Corporate Kit by overnight delivery.

What is a Registered Agent?

Most states require that corporations maintain a designated person or entity (a resident of the state of incorporation) to be responsible for receiving vital legal and tax documents on behalf of the corporation. An “agent” of the corporation “registered” with the particular state of incorporation provides this service – thus the term “Registered Agent.” Service performed by the Registered Agent include:

  • Provide a local address for service of process in the state of incorporation.
  • Forward official state and federal mail.
  • Forward state franchise tax or annual reports when required.
  • Provide additional buffer between the state and your business allowing you greater personal anonymity.
  • All service of process is sent to you promptly for your immediate attention.

The Company Corporation serves as a full time Registered Agent in all 50 states and the District of Columbia. Our fees for serving as Registered Agent vary with the state or international jurisdiction. You will find The Company Corporation the most cost effective and comprehensive resource for your business service needs.

The Company Corporation can serve as your Registered Agent in any state you require. Our annual fee for Registered Agent service is only $125 for all states. With our nationwide network of offices, we can provide a full-range of corporate services for every state in which you operate your business.

What is a Corporate Organizer- and do I need one?

When you form your new corporation, it is essential to keep accurate records. Our Corporate Kits are designed and intended to make your day-to-day corporate procedures an easy task. Take your choice of our standard, Deluxe or Attache Corporate Kit. Here is what’s included in the kit:

  • Corporate seal
  • Minute book and slipcase
  • 20 stock certificates imprinted with corporate name
  • Stock transfer ledger
  • Sample forms for minutes and bylaws

Can I keep the same bank account or do I need to open a new one once I’m incorporated?

It is necessary to open a new bank account for your new entity. Do not commingle cash. Always operate your corporation as a separate entity distinct from yourself in every respect. By using the same bank account for personal and corporate purposes, you pierce your corporate veil and allow creditors to challenge the validity of your corporation and attack your personal assets.

Can I keep or transfer my current tax ID number?

No. Your Employer Identification Number is like a social security number. Just as you would obtain a separate Social Security Number for different people, you must have a different EIN for each new company.

What is E.A.R.N.?

The E.A.R.N. program was created to help small businesses save time and money. Small businesses and individuals such as you come to us when they are starting a new venture. Most have not focused on services such as health and dental insurance, merchant credit card processing, trademark searches, check guarantee, venture capital or any of our other 40 discounted services. Each E.A.R.N. vendor has been selected for their service, pricing and timing so that you can rely on the program for all your business needs. Many E.A.R.N. members discover they need at least one of these services when they start their business. With such a low annual fee, most members renew their annual membership to take full advantage of E.A.R.N.’s numerous benefits as their businesses grow. Click here to visit the E.A.R.N. web site.

What can The Company Corporation do to help me file an international corporation?

The Company Corporation has developed strategic alliances with specialized international incorporators throughout the world enabling us to file your international company in almost any jurisdiction. Our international network offers you the most cost efficient and expedient services available, including the availability of ready-made shelf companies in major worldwide jurisdictions.

We also provide other special international services including notarization, apostilles and translation services. If you require an offshore or international company, The Company Corporation can assist you. Please be aware that most international requests will take longer than 24 hours to complete and may require additional information to register in the country of your choice.

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