How to Form a Corporation in Delaware

I’m ready to form a Delaware corporation for my startup!

If you’ve decided to set up your business as a Delaware corporation, you’re in good company. While founders have many options to choose from for their business structure (read more about choosing the right business entity) and jurisdiction of formation, traditionally the most common choice for US startups hoping to raise venture financing is to organize as a corporation under the laws of Delaware. There are multiple reasons for this – such as Delaware’s comparatively low corporate franchise taxes and the familiarity of Delaware corporate structure to investors. This article explains the mechanics of organizing a Delaware corporation.

What steps do I need to take to form a Delaware corporation?

Legally, a Delaware corporation is created by filing a certificate of incorporation with the Delaware Department of State, Division of Corporations (commonly referred to as the Delaware Secretary of State). You can read more about the mechanics of how to file a certificate of incorporation in Delaware below. Documents also will need to be signed to carry out other aspects of the corporate setup – for example, formally appointing the company’s board of directors and officers, issuing stock to the founders, adopting the bylaws, and assigning relevant intellectual property to the new company. For a more detailed list and explanation of Delaware formation documents, see this article.

Sounds like a lot of paperwork! How do I get these documents prepared, executed and filed?

The good news is that you have lots of options.

Of course, you can always hire a law firm to do this for you – ideally, a law firm that forms lots of startups and has a lot of experience in this space.

If you are more the “do it yourself” type, you can generate your own template set of Delaware corporate formation documents with customary terms for free using the Cooley GO Docs Incorporation Package.

If you generate your incorporation documents using Cooley GO, then once the documents are finalized, you will need to file the executed certificate of incorporation to legally create the company. You can do this directly through the Delaware Secretary of State, or you can use a filing service. We usually recommend our clients use a filing service for speedier processing and to help manage additional state and local filings that may be required. A filing service also will often provide Delaware registered agent services, which will be required for most newly formed Delaware corporations. Note that Delaware charges a filing fee, which is based on the authorized shares and par value as stated in the certificate of incorporation. View the corporate fee schedule here.

After the company is formed and the basic formation documents are executed, there are several related tasks founders and new companies typically need to complete, including filing Section 83(b) elections (if eligible – consult your lawyer if you’re unsure), applying for an IRS tax ID number (EIN) and setting up a bank account. You can read about these tasks and more in this article, “Post-Incorporation Checklist: 10 Next Steps to Consider.”

For startups seeking a more streamlined process, there also are platforms available that further automate the formation of your Delaware C corporation, including not only creation but also automatic filing of the certificate of incorporation, along with preparation and signing of other formation-related documentation as discussed above. Some services will even assist in obtaining an EIN and filing 83(b) elections for founder stock subject to vesting.

Stripe Atlas is one such platform that automates both the incorporation process and essential post-incorporation tasks, such as 83(b) elections, equity issuance and expedited EIN delivery. Additionally, Atlas offers access to exclusive discounts on a variety of startup services. Atlas is the only service using forms developed in collaboration with Cooley.

Cooley and Atlas are separate entities and are not related or affiliated in any way. Any information provided by Cooley, whether on Stripe Atlas or on Cooley GO, is for general informational purposes only and is not legal advice. Using Stripe Atlas or Cooley GO does not create an attorney-client relationship between any Atlas user and Cooley for any purpose. Form documents are not a substitute for legal advice, may not be suitable for your specific situation, and you should consider talking with a lawyer before filing forms generated on Cooley Go or Stripe Atlas.