How To Register A Company In Delaware

The United States (“US”) has always been an attractive place to conduct business with many choosing to do so through Delaware company incorporation. As of early 2025, nearly about 2.2 million legal entities were incorporated in the state of Delaware with two-thirds of all Fortune 500 companies having done so. Given the number of companies having chosen to incorporate in Delaware, it is clear that the state is a popular destination, but what makes it so? In this article, we look to explain why you should consider Delaware company incorporation.

Benefits Of Incorporating Your Company In Delaware

1. Ease of Incorporation

Delaware is arguably the easiest state in the US to incorporate a company as the processes are designed and structured to allow companies to complete the process as simply and as efficiently as possible. Delaware offers a level of flexibility in this process that many countries do not provide, for example:

• Delaware allows one individual to hold the position of a company’s director, shareholder, and officer, making the incorporation process easier to complete as compared to other US states
• Parties do not have to be physically present in Delaware to incorporate a company as long as they utilize a Registered Agent in Delaware
• Delaware incorporated companies are not required to utilise a local Delaware bank account
• Companies are not required to have a physical business address within Delaware
• No minimum capital requirements
• The Delaware company register cost is cheaper than other US states

2. Delaware Business-Friendly Legal Framework

One of Delaware’s most notable traits that have contributed to its reputation as a friendly business environment is the strength of their business law. Delaware business law is renowned for being incredibly favourable towards companies and has helped set a precedent for many other states to follow. 

• The Delaware General Corporation Law offers predictability and stability as it is shaped by corporate-law experts and is protected by the influence of special-interest groups
• The Delaware Legislature reviews the Delaware General Corporation Law annually to ensure that it is able to address current issues and developments
• The Delaware Court of Chancery focuses solely on business law and uses judges instead of juries
• Judges on the Court of Chancery all possess expertise in complex corporate law matters, are selected through a bipartisan, merit-based selection process and are well equipped to oversee challenging legal disputes
• Delaware has a long history or precedents that Delaware courts can utilise to help settle disputes, demonstrating a robust legal system designed to protect businesses

3. Privacy Protection

Data privacy protection relates to the handling of sensitive information and has increasingly become a topic of discussion among companies of all sizes and industries. As companies hold key pieces of information related to not only their staff, but also shareholders, companies must ensure that this information is protected to prevent it from being misused by third parties.

Delaware company register has the following advantages in privacy protection:

• Delaware companies are not required to publicly disclose shareholder names and addresses in their company filings, nor are they required to disclose their directors or officers on a public record
• Shareholders and managers of a company are only specified in the company’s operating agreement, which is private by nature

4. Tax Benefits

The US utilizes a multi-tiered tax system whereby taxes are imposed on a federal, state, and sometimes local government level. Delaware’s tax systems are unique in that it is more business friendly to companies, specifically:

• Delaware does not impose taxes on companies that operate outside of its borders
• Companies that do not have a physical office, or does not conduct business directly within Delaware will not be liable to Delaware state taxes

5. Flexibility

Delaware incorporated companies can operate with a level of flexibility that companies incorporated elsewhere often cannot enjoy. Apart from the flexibility offered during the company incorporation process, business owners can enjoy the following benefits when running their company:

• Delaware’s corporate statutes offer a great deal of flexibility in how a company structures the rights and duties of their shareholders and board members
• Shareholders, officers and directors of a Delaware company do not need to be United States residents and are not required to normally reside in Delaware
• A company’s bank accounts can be located anywhere and does not need to be maintained in Delaware
• Shareholder meetings can be conducted anywhere in the world, including via remote communication

Step-by-Step Guide To Incorporating A Company In Delaware

1. Choose Your Business Name 

Choosing a name that fits the message you want to convey to your business, the product and service offered is somewhat challenging. You also require the name of the product to be people friendly and one that your customers will easily recall.

It becomes very relevant to carry out state name availability and check to inform the owner whether the desired state is already in use in the state of incorporation. Also, the laws of the state of Delaware present certain restrictions based on the type of business as to what name you can choose, especially if it is a corporation or LLC, and what words are obligatory.

For example, a LLC name should be : 

• the words “Limited Liability Company,” or the abbreviation “LLC” or “L. L. C. ”
• be able to be identified from the names of other domestic or foreign business entities on the Secretary of State’s records.

The state can reject any name that they consider as misleading or one that could be detrimental to society. Any company name with certain words like “Bank” may need permission to be incorporated from the regulating authority. 

2. Select and/or nominate directors/members/managers (LLCs) or directors (corporations)

Limited Liability Company (LLC) can be managed by its owners which are called members or appointed managers. It is a legal entity in which, a corporation, directors function collectively as a board of directors, which is the corporation’s governing body. 

 Corporation requirements are as follow. 

• The state of Delaware mandates that a corporation must have at least one director but can have more. 
• There are no particular guidelines for age requirements enumerated by the Delaware. 
• Delaware does not have any requirement as to where directors need to be based. 
• Delaware laws for corporations did not mandate the names and addresses of a director to be incorporated in the Certificate of Incorporation. 

LLC requirements are as follow. 

• The state of Delaware has certain rules that an LLC must have one or more members/ managers. 
• Delaware law also does not have the age requirement for members / managers. 
• Delaware do not state any requirement about the place of residence for the members/managers.
• The formation of the Delaware limited liability company does not require that the names and the addresses of the member/manager to be contained in the Certificate of Formation. 

3. Get a registered agent  

A registered agent is an individual or a company that you appoint to act on your business’s behalf to accept legal notices, lawsuits, legal and tax documents and other such notices. Delaware requires every corporation as well as LLC to have a registered agent with the physical address in Delaware and P. O. boxes are not allowed. 

4. Submit the incorporation documents 

 It is necessary to go to the Department of State and submit the Certificate of Incorporation for corporations and Certificate of Formation for LLCs. 

5. Check the requirements for franchise taxes and annual reports

Delaware’s corporations are obliged to submit Annual Franchise Tax Report. The due date for corporations to file the returns is March 1 of every year. Non-exempt domestic corporations’ annual report fee is $50, while for exempt domestic corporations is $25. The franchise tax is computed according to the number of authorised shares and par value of the organisation. In addition, where the number of shares is more than 5000 then the annual fee may also rise. 

Unlike some other states the formation of LLCs in Delaware does not entail an annual filing, however, an annual tax of $300 is to be paid by June 1 of the year. 

6. Get the necessary licenses and/or permits for your business

Nearly every form of business, whether sole proprietorship or partnership, or a corporation require compliance permits and or business licenses. Depending on the state in which the business is to be established, getting a license at the municipal level as well as at the state as well as the federal level might be necessary. 

7. Fulfilling the other legal requirements and licenses 

The other areas of tax compliance and regulatory issues that you should identify in your corporation or LLC are procuring a Federal tax identification number, which is an identification number that the IRS issues to business entities. 

It is not only wise for your business but legal as well to maintain a different account for the finance of your business from your own to prove that your business’s assets are not your own assets. You can deposit the money which you received for your formation of LLC or Corporation into a bank account to apply this early.

Furthermore, a beneficial ownership information (BOI) report may also need to be sent by an LLC or corporation to FinCEN, the Financial Crimes Enforcement Network of the United States Department of Treasury, unless they are exempt from this requirement. For further details, refer to the Fin CEN’s Frequently Asked Questions on the Information Regarding Beneficial Ownership. 

8. Additional start-up considerations  

According to the structure and the decision made by the owners/management of the business, incorporating a business in Delaware may also include these variables: 

• Legal provisions of ownership for real estate
• Requirements for loan and capitalization 
• Vendor contracts 
• Professional licensing 

Do You Need to Register in Other States?

If you form your business in Delaware but doing business in other states, it may be necessary for you to foreign qualify in those states. The LLCs and corporations are to be considered domestic only to the state of Incorporation and they are classified as international entities in the other states. Businesses operating in the United States are obliged to register especially if they are foreigners and this is known as foreign qualification. 

Foreign qualification is quite similar to the process of incorporating an organization. An application has to be filed with the state and respective state filing fees have to be paid. There are also constant demands that foreign-qualified companies make to states, for instance, the filing of annual reports and fees. Thus, when you register the company in Delaware, and foreign qualification in another state or other states, you will have to make the subsequent filings and pay the fees in both Delaware and the state(s) of foreign qualification. 

What is regarded as transacting business may be different from state to state and some criteria are : 

• Physical presence: Does that company have an office in one of those states? 
• Employees: Does the company have employees in that state?  
• Bank account: Do you have the bank account of your business in that state? 
• Transactions orders: Do you serve customers or receive orders from that state? 

Conclusion

With its numerous corporate advantages, it’s no surprise that Delaware remains a top choice for company incorporation. At FastLane Group, we bring extensive experience in global business incorporation and are ready to support you every step of the way. Get in touch with our team today to begin your journey.