Register Company in Delaware
The process of Delaware company registration is hassle-free if you know how. With Tetra Consultants at the wheel, you will be able to dedicate your time and resources to other more important business channels.
With our lean-and-mean mentality, you can rely on our team of experts to provide you a seamless experience throughout the whole process of Delaware business set up. Our ultimate goal is for your Delaware company to be operationally ready within the stipulated time frame.
Our service package includes everything you will require to do business in Delaware:
- Company registration with Delaware Division of Corporations
- Local company secretary and registered address
- Opening local or international corporate bank account
- Annual filling and tax services
Can I register my company in Delaware?
- Home to many Fortune 500 companies, the state of Delaware has been acclaimed the “State of Choice” by many businesses. It is not unusual to wonder why Delaware has made itself known as the preferred state among so many businesses. Besides its low tax rates and simplified incorporation processes, setting up a business in Delaware has many other benefits as well. If you are looking to expand into the state of choice, you came to the right place.
- As such, anyone can register for a company in Delaware as long as they meet the requirements. Every company in Delaware must have at least one director and there are no age, nationality, or residence restrictions for directors.
Delaware registered agent
- In Delaware, you do not have to be a resident of Delaware or the United States to set up a company, and do not need a local registered address.
- However, every company must have a registered agent that will act as the liaison between the company and the Delaware Division of Corporations. A Delaware registered agent is defined as a Delaware resident or business entity that has a physical residence in Delaware, has been authorised to carry out business within Delaware and can receive official mail from the state authorities during normal working hours.
How long does it take to register a company in Delaware?
- Tetra Consultants will complete your Delaware company registration within 1 week. After receiving the required due diligence documents of the directors and shareholders, Tetra Consultants will search for the availability of your preferred company name in the Delaware Division of Corporations.
- Throughout the whole company registration process, you will not be required to travel to Delaware.
- After Tetra Consultants has registered your Delaware company, you can expect to receive the documents of your new company including certificate of formation, memorandum & articles of association as well as the register of directors and shareholders.
- Within 4 weeks upon company registration, Tetra Consultants will open a corporate bank account either a local or international reputable bank.
- Consequently, you can expect to start operations and issue invoices with your Delaware company within 5 weeks upon engaging Tetra Consultants.
- If you are keen to know more about the process, Tetra Consultants has prepared a step by step explanation of all steps required for Delaware company registration.
What types of business activities can be carried out in Delaware?
A popular spot to incorporate a business, Delaware permits a myriad of business activities. In general, there are no restrictions on the type of business activities that a corporation can conduct. However, based on Delaware’s laws, doing business as an insurance company in Delaware does not constitute business activity for foreign limited liability companies.
Is Delaware a tax haven?
- Delaware is often considered a tax haven because of the numerous tax benefits it offers to both local and foreign companies. All businesses in Delaware do not need to pay corporate taxes if they have no business activities in Delaware. Intangible assets such as trademarks and patents are also non-taxable.
- In addition, there are no taxes on personal property or sale taxes in Delaware. Instead, sellers of goods and services are expected to pay a gross receipts tax. The personal income tax in Delaware is also kept relatively low, ranging from 0% to a maximum of 6.6%.
- For LLCs, income from US sources will be subject to taxes. However, the LLC does not have American members and is not set up in the US physically, then income sourced from outside the US will not be subject to taxes.
- For corporations, both income sourced from the US and outside the US will be subject to taxes, in accordance with the laws of the US Treasury.
Is an Apostille needed?
- An Apostille refers to the legal authorization for a document as provided by a state authority. For Delaware businesses that are conducting business with a nation that is part of the Hague Conference, you will need an Apostille granted and authorized by the Secretary of State in Delaware for these documents to be valid.
What types of companies are there?
Delaware is home to a myriad of business entities that include sole proprietorship, corporation, general partnership and more. Before the start of the engagement, Tetra Consultants will fully understand your business before recommending the most optimum Delaware business entity. Some considerations we take into account include the type of business activity, tax obligations and nationalities of shareholders and directors.
- Sole proprietorship is the simplest form of a business enterprise and it is conducted by an individual. Unlike other business entities, the sole proprietorship structure does not lead to the formation of a separate legal entity. As such, the proprietor can be personally liable for all debts and obligations incurred by the business. Any transfer of business is not allowed and hence, there is no continuity.
- If you are looking to set up a small business (minimart, art studio, bakery, etc.) yourself that includes the advantages of an easy startup and complete control, Sole Proprietorship may be the business form for you.
- To operate a sole proprietorship, registration with the state is not necessary. However, if a name that is different from your own is adopted, you will have to formally register with the state.
- Aside from the sole proprietorship structure, all other business entities are required to be filed with the Delaware Division of Corporations.
- A commonly adopted form of business entity, corporations are entities formed under the state or federal law. As a separate legal entity, owners will not be personally liable for any debts and obligations incurred by the business. Corporations can also sue or be sued in its own name. Managed by its board of directors, these directors hold various fiduciary duties to the corporation.
- In general, the Delaware laws does not mandate a minimum capital requirement on corporations nor a principal place of business. Directors, officers or stakeholders of the corporations do not have to reside in Delaware either. However, specific corporate structures such as the C and S corporations may have different requirements.
- A C corporation refers to any corporations that is taxed separately from its owners. Typically, for-profit corporations are classified as a C corporation. This default classification is not limited by the number of shareholders.
- Meanwhile, S corporations are taxed specially and may benefit from certain tax advantages. As pass-through taxation entities, no income tax is required to be paid at the corporate level. Instead, profit or losses are reported as part of the owners’ personal tax returns. Any tax is thus paid at the individual level by the owners. This way, S corporation owners are not doubly taxed.
- There is a multitude of requirements when setting up a C corporation vis-à-vis a S corporation. To qualify as a S corporation, there is a restriction on the number of shareholders. S corporation can have no more than a hundred shareholders. Shareholders are also required to be citizens or residents of the United States.
- However, such restrictions do not apply to C corporations. S corporations are also not allowed to be owned by other C corporations or S corporations. Unlike C corporations, S corporations cannot benefit from creating multiple classes and are limited to only one class of stock.
- Tetra Consultants will recommend you to set up a S-corp if you are a USA citizen or resident looking to start your own private business. With a S-corp, you will be able to benefit from the single layer of taxation scheme.
- On the other hand, Tetra Consultants will recommend you to set up a C-corp if you are a foreigner looking to do business in Delaware.
- In addition, a Delaware C-corp will allow your business to go public in the future. Thus, it is the recommended type of Delaware company registration for non-residents.
Public Benefit Corporations
- With a structure similar to other Delaware corporations, public benefit corporations are legally mandated to act morally, ethically and responsibly.
- Besides the usual procedures mandated of every Delaware corporation, the Certificate of Incorporation has to further include the company’s altruistic goal.
- You should consider incorporating your business as a public benefit corporation if you are planning to run a socially conscious business that comes with an altruistic vision of serving the public good. Unlike non-profit corporations, public benefit corporations can still benefit from engaging in profit-generating activities.
Limited Liability Companies
- Under the limited liability entity, directors will not be personally liable for any debts or obligations incurred by the business. They will only be liable up to a specified amount of liability insurance declared. These companies provide different classes of members that comes with specific rights, powers and duties.
- LLC requirements include having at least one or more members and managers. There are no restrictions as to the residency of the corporation’s members or managers. When setting up an LLC, every corporation must maintain a registered office and a registered agent.
- Incorporating a limited liability company in Delaware comes with many inherent benefits. This includes low startup costs, minimal requirements to set up and enhanced privacy protection.
- You may consider this easy and inexpensive option to structure your small business. By opting for a limited liability company structure, you can protect your personal assets while escaping the cost and complexity that corporations may bring.
- While the structural differences between a limited liability company and a corporation may be minimal, you should still look out for several factors. Profits and losses of a limited liability company are passed through to individual owners, and are taxed independently of the corporation. This scheme is distinctive from the way a corporation is taxed.
- When filing for income taxes, LLC can be taxed as C corp, S corp, partnership or proprietorship. If the LLC chooses to be taxed as a C corp, then the LLC will be taxed based on corporate taxes but the dividends the shareholders received will be taxed based on the individual’s personal income tax.
- Ownership is another important aspect to consider. Unlike a limited liability company, a corporation is allowed to issue or transfer shares of stocks.
- A separate legal entity, this special form includes general partners as well as limited partners. General partners are distinguished from limited partners based on their liability to the debts and obligations of the company.
- A general partner remains fully liable while a limited partner is only liable up to a specified amount of liability insurance declared as well as their own wrongful acts. A limited partner traditionally holds no management participation benefit in the company. However, the flexibility of Delaware’s laws makes it possible to give considerable management participation benefit to limited partners.
- Limited Partnership is a great option to consider if you would like to maintain complete control over the company while allowing investors to contribute in monetary forms.
- Known to be one of Delaware’s most flexible business structure, the Delaware statutory trust is an unincorporated association formed by filing a certificate of trust with the state.
- This trust instrument serves as a governing body to provide for the conduct of the business. With a perpetual existence, the Delaware statutory trust hold similar properties to limited liability companies. Trustees are not liable for any obligations incurred by the statutory trusts.
- A private trust agreement is required for its formation. Upon the completion of the agreement, a Certificate of Trust can then be obtained. The Delaware statutory trust also mandates that at least one trustee has to be either a Delaware resident or have a principal place of business in Delaware. Delaware’s flexible laws allowed for trusts to be set up without any filing.
- Furthermore, there is also no requirement for approval to be acquired by any authority in Delaware. As such, the process of setting up a trust can often be done quickly.
- Its primary functionality of protecting assets from creditors makes it a popular option for mortgages, real estate investment trusts, automobiles leases and to finance commercial airplanes.
- Commonly adopted, it is a relationship that involves the management participation of all partners.
How to register a company in Delaware?
Step 1: Choosing an optimum business structure
- Prior to company formation, it is essential to choose the correct type of company. Tetra Consultants will advise you on the most optimum business entity to suit your needs. Generally, the most common type of company in Delaware is the limited liability company, which is also known as a company limited by shares.
Step 2: Reservation of company name
- Tetra Consultants will search and reserve your company name through the Delaware Secretary of State. Our team will reserve your company name for up to 120 days.
Step 3: Preparation and submission of relevant documents
- Once your company name has been approved, Tetra Consultants will proceed to prepare the relevant corporate documents such as the appropriate forms and the Articles of Organization. If you are registering a Corporation, the document required will be called the Certificate of Corporation, while for LLCs it is called the Certificate of Organization.
- After the relevant documents have been prepared, Tetra Consultants will register your company with the Delaware Department of State, Division of Corporations.
- Upon successful registration of your company, you will receive the Certificate of Formation and a certified copy of the company’s Articles of Organization.
Step 4: Application of business license
- Businesses are required to obtain a business license as long as they conduct business activities in Delaware or are incorporated in Delaware.
- Tetra Consultants will assist your company in applying for a business license from the Division of Revenue through the One Stop Business Licensing and Registration Service.
Step 5: Tax registration
- Tetra Consultants will complete tax registration with the Delaware Division of Revenue through the One Stop Business Licensing and Registration Service.
- We will assist your company to secure an Employer Identification Number (EIN), which is needed for tax filing and payment. The EIN can be registered for once the articles of incorporation have been successfully approved. To apply for the EIN, you will have to submit Form SS-4 to the IRS.
- Generally, the corporate income tax for businesses that conduct business activities in Delaware is 8.7%.
- Once your company has been registered for tax, Tetra Consultants will continue to assist your company in meeting its annual accounting and tax obligations.
Step 6: Corporate bank account opening
- After you have registered your company, you can proceed to open a corporate bank account.
- Tetra Consultants will assist in consolidating the documents and opening a corporate bank account with a reputable bank of your choice.
- For many banks in the United States, traveling to the United States to open the bank account in person is often preferred by local banks. However, not all local banks have such a requirement. If travel is required, we will have a representative accompany you to the bank meeting. Alternatively, our team will negotiate with the banks to conduct a conference call instead or to request for a waiver.
- Once the bank account has been successfully opened, Tetra Consultants will courier the internet banking token and access codes to your preferred address.
Step 7: Registration with relevant social services
- All Delaware businesses must register with the Delaware Division of Unemployment Insurance and the Delaware Office of Workers Compensation.
- Tetra Consultants will register your company with the relevant government agencies through the One Stop Business Licensing and Registration Service.
Why do companies register in Delaware?
Before you set up a Delaware company, it is important to understand the business landscape of the jurisdiction. This is to ensure that your newly established entity will be able to safely and legally conduct business, while striving towards your long-term business goals.
- Delaware is home to a business-friendly environment. With simple incorporation processes – filings can be guaranteed to be completed easily and quickly.
- Known for its multitude of tax benefits – Delaware companies are not subjected to corporate income tax if its business is conducted in another state. Additionally, investors are not required to make any tax royalty payments. Non-Delaware investors can further benefit from zero tax on their stock shares.
- Corporate structures are flexible in Delaware. This flexibility allows for owners, officers and directors of corporations to incorporate in the state even without holding state residency.
- With an attractive tax regime, Delaware remains one of the most popular state to register a company in the United States of America. As such, incorporating in Delaware may be costlier than that of other states. While Delaware company registration cost may not be high, the additional expenses incurred such as the fees to hire a registered agent if your business is not located in Delaware can be costly.
- The additional franchise taxes may lead to a double taxation scheme. Delaware’s laws mandate that a Delaware-incorporated corporation will have to pay the annual franchise tax in the state which you are doing business in as well as in Delaware. Thus, if you own a large company with business conducted in multiple states, taxes may be high.
- Foreign qualification costs is another aspect to consider. If your business is looking to expand physically out of Delaware, your company will have to register to transact in another state. The additional foreign qualification costs and fees may make incorporating in Delaware less financially attractive.
- With a strong legal system, commercial disputes in Delaware are primarily handled by a specialized court, the Court of Chancery. Served by judges with corporate law backgrounds, commercial disputes can be managed quickly and effectively. If your business unexpectedly lands in a commercial dispute in Delaware, you do not have to worry because all cases are tried exclusively by professional judges.
- Privacy is respected in Delaware. Enforcing privacy laws strictly, directors and officers are not required to be named in formation documents. As such, the Certificate of Formation as well as the public record will not name members and managers.
- Delaware’s incorporation process only requires a registered Delaware agent to maintain a record of the corporation’s contact person and address. However, the Delaware Division of Corporations will not request, obtain or store any information regarding the members and managers. This allows companies to enjoy some sort of anonymity.
- Delaware also mandates companies to file annual reports even if one has already done so in their home state. This additional requirement may be cumbersome.
Find out more!
Contact us to find out more about how to register company in Delaware. Our team of experts will revert within the next 24 hours.
How do you check if a company is registered in Delaware?
- You can check if a company is registered in Delaware by performing a Delaware company registration search on the official Delaware Secretary of State website. To further refine your Delaware company lookup, you can include the file number of the company you are searching for. A state file number is a number that is issued to a new company in Delaware on the date of incorporation.
How much does it cost to register a company in Delaware?
- This depends on the exact services required from Tetra Consultants. Our fees are inclusive of government fees and all fees will be clearly stated in our engagement letter prior to the start of the engagement. Tetra Consultants believes in transparency with our valued clients and there are no hidden fees.
- Tetra Consultants will complete your Delaware company registration online and once completed, our team will send you the full corporate documents such as articles of incorporation.
What is a Delaware registration number?
- The Delaware registration number, also known as the Delaware state file number, is the number that is issued to a Delaware registered company on the date of incorporation. This registration number consists of 7 digits and is used to identify a company in the Delaware Division of Corporations’ database.
- The Delaware state file number should not be confused with the tax identification number (EIN) which is used to file taxes.
Do Delaware corporations have a registration number?
- Yes, all Delaware corporations have a registration number. The Delaware registration number, also known as the Delaware state file number, is issued to a new company upon successful incorporation in Delaware, together with the business registration certificate.
- You can check a company’s registration number via the Delaware business lookup function in the official Delaware Division of Corporations website
Why is Delaware tax free?
- Delaware is tax-free for businesses that do not have any business activities within Delaware. The main aim of this policy is to attract new businesses to set up in Delaware, as well as foreign direct investments from other countries.
How much does it cost to register a Delaware LLC?
- The fees to register for a company and obtain an article of organization, also known as the certificate of incorporation, is the same for all Delaware state company registration and this includes a limited liability company (LLC). An incorporation fee will be charged for the certificate of incorporation and this fee is only applicable for corporations with 1,500 shares of no par value. The incorporation fee will be higher for creating an LLC with greater number of shares.