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Choosing Your Business Entity
Corporation
What Is It?
A corporation is one of the most common types of business entities. Any person or entity may form a corporation, singly or jointly with others, and without regard to such person's or entity's residence, domicile or state of incorporation or formation. A corporation has a separate legal existence, apart from its owners, and can conduct business in its own name.
Management:
Management of a corporation is typically centralized. Its business affairs are usually managed by or under the direction of the board of directors. The board generally appoints officers who oversee the day-to-day operations of the corporation.
Formation Requirements:
A Delaware corporation is formed when an incorporator properly files a certificate of incorporation in the Office of the Secretary of State of the State of Delaware. Typically, the organization of a Delaware corporation requires the election of directors, the adoption of bylaws, the issuance of stock and the appointment of officers after a certificate of incorporation has been filed. A corporation formed in Delaware must also maintain a registered agent and a registered office in the state. DCS can act as your registered agent in Delaware and can provide you with a registered office in Delaware.
Liability Issues:
One of the most important reasons for forming a corporation may be to protect your personal assets in the event of a business-related lawsuit or if your business should fail. Ordinarily, stockholders of a corporation are not held personally liable for the payment of the corporation's debts, except by reason of their own conduct or acts. Such limited liability is generally not available to a sole proprietorship or general partnership in which the individuals or partners are generally personally liable for all business debts. However, such limited liability is also available in a limited liability company ("LLC"), and DCS can help you form an LLC if you so desire.
Franchise Taxes:
All Delaware corporations must pay an annual state franchise tax. The amount of the franchise tax is generally based upon the number of shares of stock the corporation is authorized to issue. The minimum annual state franchise tax is $35.00 based upon 3,000 shares or less. Taxes and annual reports are due to be received no later than March 1 of each year.
The information contained on this web site is for general information purposes only, is not intended as legal advice and may not apply to your particular situation. If you require legal advice regarding a Delaware entity we will be happy to refer you to an attorney familiar with Delaware law.
We recommend that you consult your attorney or accountant if you have specific goals or hope to achieve specific tax results.
To facilitate the formation of a corporation, please fill out and return to us the Corporation Order Form. Please call our offices at (302) 482-4262 or email us for assistance.
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