Incorporate in Delaware

People incorporate a Delaware corporation instead of a LLC when the business is large and capital needs to be raised. A Delaware corporation offers all corporate options, from small closed corporation to going-public.

Delaware corporate structure

Incorporation requirements in Delaware Theoretically, a Delaware company formation requires just one person, resident anywhere in the world and of any nationality, who may serve as a director, shareholder and company officer at the same time. There is no minimum capital required to form a Delaware Corporation.
Shareholder The shareholders own the Delaware corporation. Shareholders have the right to vote in board meetings and appoint the directors or other company officers. A shareholder might profit either by receiving dividents or by way of share price increase.
Directors Directors are responsible for running the corporation according to board instructions. Their duties include corporate management and major business decisions. Directors may receive a salary and/or shares from the company.
Other company officers Delaware corporations may have more officers, for example President, CEO, CFO, Sales Manager, Secretary and Treasurer, who are usually involved in day-to-day business activities.
By-laws / annual report Neither the director/shareholder names/addresses nor the by-laws are part of the public record at formation date. However, a Delaware corporation needs to file an annual report which discloses the names and addresses of the company officers. Therefore, the Delaware corporation does not offer the same level of privacy as the LLC does.
Delaware registered agent Corporations incorporated in Delaware are required to maintain a registered agent. Futuramax do provide registered agent services in Delaware and the registered agent fee for the first year is included in the formation costs.

Delaware corporation advantages

• Online company formation, often completed within minutes
• The corporation has a separate legal personality from its owners
• A Delaware corporation may operate in the USA or worldwide
• The corporation can raise capital by selling shares
• Running a corporation instead of an LLC gives more prestige

Delaware corporations and international business

Companies incorporated in the United States of America are well known worldwide. By choosing Delaware as a corporate home, international entrepreneurs can benefit from a secure legal framework, low company formation costs and the ability to incorporate online - often within minutes rather than weeks or months as in many foreign countries.

Limitation of liablity

Shareholders are only liable for debts of the corporation to the extent of their investment in the company. If a shareholder paid for example $100 for his shares he will loose these $100 if the corporation fails. There is no personal liablity.

Corporate taxation*

A corporation is taxed separtely from its owners and officers. If the corporation does not do any business in Delaware, it is not subject to Delaware state taxes. All US corporations, including Delaware corporations, need to file a federal tax return each year, regardless of where the company operates. Foreign corporation owners might however benefit from the extensive US double taxation treaty network.

Annual compliance

Holding annual board meetings and keeping board minutes is an essential requirement to operate a Delaware corporation according to strict rules. Failure to do so could result in creditors "piecing the corporate veil", thus making a company officer personally liable.

Delaware corporation franchise tax*

All Delaware corporations, regardless of where they do business, pay an annual franchise tax to the State of Delaware. The franchise tax can be as low as $75, but varies depending on the number of shares and share capital structure. Due date for franchise tax payments is the 1st day of March in subsequent years.