DE · formation guide
Incorporating in Delaware
The default for venture-funded startups and complex ownership.
Who this state fits
Startups raising priced rounds, multi-party joint ventures, companies planning an exit.
Multiple companies: Standard for a parent holding company with several operating subsidiaries, and for a Series LLC where each series holds a distinct asset.
Pros
- Court of Chancery and mature case law make outcomes predictable
- Investors, banks, and acquirers already know the documents
- Series LLCs and flexible LLC contract terms are well supported
- Fast expedited filings when a deal is on a clock
- Directors and officers get well-tested statutory protections
Cons
- Highest ongoing cost of the popular states for a small business
- $300 LLC franchise tax is due whether or not you made money
- Corporate franchise tax can surprise you if you authorize a lot of shares
- You still register and pay tax in the state where you actually operate
- Overkill for a single-owner local business
Filing walkthrough
- 1
Reserve or check the name
Use the Division of Corporations name availability search; reservation is optional but cheap.
- 2
Engage a Delaware registered agent
Nearly all Delaware entities use a commercial agent; keep their file number handy.
- 3
File the Certificate of Formation or Incorporation
File through the Division of Corporations, choosing standard or expedited service.
- 4
Corporations: hold the organizational meeting
Adopt bylaws, appoint directors, issue stock, and approve 83(b) elections where relevant.
- 5
LLCs: sign the operating agreement
This is where Delaware's contractual flexibility actually lives — waterfall, voting, transfer terms.
- 6
Get your EIN, then set the tax calendar
LLC franchise tax due June 1; corporate annual report and franchise tax due March 1.
After the state approves your filing, continue with the EIN and tax walkthrough.