Delaware Corporation

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,788 reviews

Jump to Section

Need help with Articles of Incorporation?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

What is a Delaware Corporation?

A Delaware corporation is a legally registered business entity in the State of Delaware. Incorporation allows a company to conduct business. There are two types of Delaware corporations, including C corporations and S corporations.

Benefits of Delaware Corporate Law

Delaware has made a concerted effort to establish itself as a desirable location for business incorporations. The state offers several critical advantages related to financial, taxation, legal, and privacy issues. In addition, businesses communities worldwide recognize the state as fertile ground for the next big startup.

Here are seven specific benefits associated with Delaware corporate laws:

  • Tax Advantages. Delaware does not tax state-registered corporations doing business from another state. Additionally, shareholders, who do not live in Delaware, are exempt from state income tax on shares held in the state. Delaware is considered a “tax haven” due to these advantages.
  • Corporation Court. Delaware’s Court of Chancery only hears cases involving corporations. The judges are corporate law experts. As a result, the court’s decisions are more predictable than those in other states. This advantage could be significant.
  • Expedited Business Filings. Delaware’s commitment to corporations allows businesses to receive their documents on the same day of request, with many in as little as one hour. However, expedited business filings come with an additional cost and are often more expensive. Factor them into your budget and planning efforts to avoid unexpected issues.
  • Privacy. Anonymity is essential for strategic business management and protecting competitive advantage. When you incorporate in Delaware, you are not required to disclose the names of your directors and officers to the state. This feature allows your company to maintain anonymity.
  • No Residency Requirements. There is no requirement for residency. Officers, directors, and shareholders do not have to be Delaware residents. This option allows startups and businesses to solicit contracts across a wide geographic area.
  • Director Flexibility. Delaware law permits a single individual to serve as an officer, director, and shareholder, which is advantageous for small businesses. Therefore, you do not have to pull together a typical team of corporate stakeholders to support your startup.
  • Investors Love Delaware. If you’re looking for angel investors or venture capital, keep in mind that most of these investors prefer that you incorporate in Delaware. They enjoy the privilege and flexibility that the state provides, which allows them to maximize their investments.

Here is an article that discusses Delaware’s corporate law.

Why Do So Many Companies Incorporate in Delaware?

Companies incorporate tax advantages, corporation courts, flexibility, and privacy. Therefore, the state prioritizes support to corporations smartly and efficiently. For example, you can select a name, form a corporation, and get a Certificate of Good Standing (CGS) within a few hours without much pushback.

There are two other reasons why so many companies incorporate in Delaware:

  • Predictability. There is a political consensus to keep laws current and relevant and seek advice from Delaware’s corporate law specialists on how to do so. Corporations want to operate under modern rules that clearly define what they are and are not permitted to do. Delaware’s promise to deliver responsively on corporate services attracts many businesses to the state.
  • Expedited Dispute Resolution. The other primary reason corporations incorporate in Delaware is the caliber of courts and judges. Delaware has a special court, the Court of Chancery, that can resolve corporate law disputes without a jury trial. As such, corporations can expect corporate law judges to preside over their legal disputes for an expeditious resolution.

What is the Difference Between a Delaware Corporation and LLC?

There are several differences between a Delaware corporation and a limited liability company (LLC). However, the most significant difference is that a Delaware corporation can issue stock, whereas an LLC cannot. This difference significantly impacts a startup’s ability to raise capital, as many investors prefer investing in corporations with fewer limitations.

Here are three more differences between a corporation and LLC in Delaware to note:

  • Organization. A Delaware LLC must have at least one manager and members who are also owners. An Operating Agreement is critical with an LLC because it details its structure, most formalities, and operating procedures. This document is also regarded as one of the reasons why a Delaware LLC is more adaptable than a corporation.
  • Capital Capacity. Corporations can issue stock on the public market, and Delaware corporations are owned by their shareholders. Shareholders have the right to both issue and sell stock to raise capital. LLCs cannot issue stock, meaning that a business raises capital based on investor amounts.
  • Voting Rights. When it comes to an LLC, you’ll notice that the LLC Operating Agreement is a standout feature, which is why it’s highly recommended. It can specify the voting rights of LLC members, which are pretty flexible. By contrast, all stockholders of corporations have voting rights.
Meet some lawyers on our platform

Elbert T.

1 project on CC
View Profile

Brad H.

8 projects on CC
View Profile

Gregory F.

2 projects on CC
View Profile

Daehoon P.

75 projects on CC
View Profile

Requirements for Delaware Corporations

There are two kinds of legal entities available for incorporation in the State of Delaware: S-Corp and C-Corp. To incorporate in Delaware, businesses must submit all required documents to the Secretary of State’s office and then pay service fees for the corporate formation process. A Delaware corporation is ready to operate once the business owner receives the Articles of Incorporation.

Below, we’ve outlined three additional requirements for forming Delaware corporations:

Requirement 1. Documents

The requirements for forming a Delaware corporation are identical for residents and non-residents seeking to create a Delaware corporation. The following documents are required for the formation of a Delaware corporation:

If you do not have these documents, corporate lawyers have training and experience. They can also offer you legal advice so that you achieve the legal and financial outcomes that your company desires. Otherwise, you could make errors that impact you significantly in the future.

Requirement 2. Unique Corporation Name

The corporation’s name must be unique to meet Delaware’s corporation requirements. Before the incorporation process is complete, business owners can reserve the corporation’s name. Then, owners can conduct an online search to determine if the chosen name is available.

Requirement 3. Named Directors

Delaware corporations are required to have at least one director. The selected director can have residency or citizenship anywhere globally and is not for public disclosure. This level of privacy is desirable to some companies and business leaders.

Delaware Corporation Tax

Delaware corporations may elect their tax status but default to “C corp” status if none are selected. As a result, C-corporations face double taxation, which is the primary disadvantage of C corporations. You could also register as an S corp, a pass-through entity.

State Taxes Not Required

Delaware has no sales tax, and it makes no difference whether a business has a physical presence in the state or not. Additionally, there are no state corporate income taxes on the services and goods provided by non-resident corporations. These tax advantages lend to Delaware being a tax shelter for wise investors and business owners.

Post a project in ContractsCounsel’s marketplace to get free flat fee proposals from lawyers to set up a Delaware corporation. All lawyers are vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Michael T. on ContractsCounsel
View Michael
Member Since:
June 13, 2022

Michael T.

Lawyer
Free Consultation
Get Free Proposal
Fairfax, Virginia
32 Yrs Experience
Licensed in DC, MD, VA
College of William and Mary

I have been in practice since 1990 and practice in D.C., Maryland, and Virginia. I am an experienced litigator and look forward to resolving your legal questions as efficiently as possible.

Richard G. on ContractsCounsel
View Richard
Member Since:
June 20, 2022

Richard G.

Attorney
Free Consultation
Get Free Proposal
Greensboro, NC
2 Yrs Experience
Licensed in NC
University of Elon School of Law

Hello! I am an Iowa native trying to bring some Midwest problem-solving to southern civil law. I thoroughly enjoy getting to know the individuals and businesses I assist. I practice estate planning and business formation and, with my litigation experience in mind, I help clients plan to ensure they and their interests are protected in the future.

Danielle G. on ContractsCounsel
View Danielle
Member Since:
July 12, 2022

Danielle G.

Attorney and Founder at Danielle D. Giovannone Law Office
Free Consultation
Get Free Proposal
Schenectady, NY
15 Yrs Experience
Licensed in NY
Fordham University School of Law

Danielle Giovannone is the principal of Danielle D. Giovannone Law Office. In her experience, Danielle has found that many business do not require in-house legal counsel, but still need outside counsel that knows their business just as well as in-house counsel. This need inspired Danielle to start her firm. Before starting her firm, Danielle served as Contracts Counsel at Siena College and as an attorney at the New York City Department of Education, Office of the General Counsel. At the NYCDOE, she served as lead counsel negotiating and drafting large-scale commercial agreements, including contracts with major technology firms on behalf of the school district. Prior to the NYCDOE, Danielle worked as an associate at a small corporate and securities law firm, where she gained hands-on experience right out of law school. Danielle has provided legal and policy advice on intellectual property and data privacy matters, as well as corporate law, formation and compliance, employer liability, insurance, regulatory matters, general municipal matters and non-profit issues. Danielle holds a J.D. from Fordham University School of Law and a B.S. from Cornell University. She is active in her Capital District community providing pro bono services to the Legal Project, and has served as Co-Chair to the Niskayuna Co-op Nursery School and Vice President of Services to the Craig Elementary School Parent Teacher Organization. Danielle is a member of the New York State Bar Association.

Michael J. on ContractsCounsel
View Michael
Member Since:
July 14, 2022

Michael J.

Partner
Free Consultation
Get Free Proposal
Warren, New Jersey
14 Yrs Experience
Licensed in NJ, NY
New York Law School

Combining extensive experience in litigation and as general counsel for a real estate and private equity company, I provide ongoing guidance and support to clients on a variety of transactional matters, including business formation, partnership agreements, corporate agreements, commercial and residential leasing, and employment issues.

Anand A. on ContractsCounsel
View Anand
Member Since:
July 17, 2022

Anand A.

Counsel
Free Consultation
Get Free Proposal
Philadelphia, PA
8 Yrs Experience
Licensed in NJ, PA
Rutgers University School of Law

Anand is an entrepreneur and attorney with a wide-ranging background. In his legal capacity, Anand has represented parties in (i) commercial finance, (ii) corporate, and (iii) real estate matters throughout the country, including New Jersey, Pennsylvania, Delaware, Arizona, and Georgia. He is well-versed in business formation and management, reviewing and negotiating contracts, advising clients on financing strategy, and various other arenas in which individuals and businesses commonly find themselves. As an entrepreneur, Anand is involved in the hospitality industry and commercial real estate. His approach to the legal practice is to treat clients fairly and provide the highest quality representation possible. Anand received his law degree from Rutgers University School of Law in 2013 and his Bachelor of Business Administration from Pace University, Lubin School of Business in 2007.

Christopher M. on ContractsCounsel
View Christopher
Member Since:
August 16, 2022

Christopher M.

Corporate Counsel
Free Consultation
Get Free Proposal
North Cariolina
2 Yrs Experience
Licensed in CA
California Western

I am a corporate attorney with several years of experience with contracts, corporate and business, government projects, and employment law.

Marc S. on ContractsCounsel
View Marc
Member Since:
July 28, 2022

Marc S.

Attorney
Free Consultation
Get Free Proposal
Henderson, Nevada
41 Yrs Experience
Licensed in NV
Southwestern University

Have been practicing real property and business law in Nevada for over 40 years. No longer handling any litigation, transactional matters only.

Howard B. on ContractsCounsel
View Howard
Member Since:
July 29, 2022

Howard B.

Managing Member
Free Consultation
Get Free Proposal
Tulsa, Ok
9 Yrs Experience
Licensed in OK
University of Tulsa

Berkson is a dedicated, practical, and detail-oriented attorney licensed to practice in every state court of Oklahoma and the United States Northern and Eastern District Courts. He graduated from the University of Tulsa College of Law with Honors. While there, he received awards for highest grade in trial practice, legal research, and civil procedure. He was also the Executive Notes and Comments Editor for the Energy Law Journal, the official journal of the Energy Bar Association in Washington, D.C. The Energy Law Journal is one of the few peer-reviewed journals in the legal profession. Prior to becoming an attorney, Howard Berkson held executive positions involving a wide range of business and human resources management functions. He has in-depth knowledge of both business and HR practices. During his business career, Berkson negotiated, wrote, red-lined, and disputed contracts. He has answered charges, handled inspections, and supervised audits involving numerous agencies including the Department of Labor, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and various state agencies. Berkson honed his analytical and writing skills while earning his Bachelor of Arts degree in Philosophy from the University of Washington. He went on to obtain a Master of Arts in Labor and Industrial Relations from the University of Illinois. Berkson’s work can be found in such publications as The Energy Law Journal, Human Resource Management Review and Personnel Psychology. He is a member of Phi Alpha Delta law fraternity and of Phi Kappa Phi honor society.

Erik D. on ContractsCounsel
View Erik
Member Since:
July 31, 2022

Erik D.

Attorney
Free Consultation
Get Free Proposal
Tampa
13 Yrs Experience
Licensed in FL
Stetson University College of Law

Erik has been a practicing attorney in Florida for over a decade. He specializes in employment and real estate contracts. He has represented clients big and small and can assist with any contract issue.

Domonick G. on ContractsCounsel
View Domonick
Member Since:
August 1, 2022

Domonick G.

Attorney
Free Consultation
Get Free Proposal
Houston
1 Yr Experience
Licensed in MO
Thurgood Marshall School of law

I am a licensed attorney who specializes in business law, personal injury and contracts.

Travis D. on ContractsCounsel
View Travis
Member Since:
August 8, 2022

Travis D.

Partner
Free Consultation
Get Free Proposal
Norman, OK
2 Yrs Experience
Licensed in OK
University of Oklahoma

Travis counsels individuals and businesses on a broad range of complex topics. His practice centers on producing efficient, client-driven results. He concentrates his practice on real estate and general business matters with an emphasis on assisting clients both before and after problems occur by drafting contracts designed to best position clients to avoid disputes and litigating matters to a final resolution if problems emerge. Born and raised in Oklahoma, Travis is a triple graduate of the University of Oklahoma, having obtained his Bachelor of Arts, Masters of Business Administration, and Juris Doctor degrees from OU. Prior to practicing law, Travis managed the finances and business operations of a successful construction supply company for several years. This insight into sophisticated business dealings, contractual issues, and strategic planning makes him uniquely qualified to handle a wide range of legal matters. Travis lives in Norman, Oklahoma, with his wife, Haley, dogs, Walter and Poppy, and cat, Ernest. Outside of the office, Travis enjoys playing golf, reading, and biking.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call