How to Form a C Corporation in Delaware

Introduction

Incorporating your business in Delaware is a straightforward process, but it’s important to follow the right steps so that you can form your corporation legally. Here are the documents you’ll need to file and what they do:

Choose a unique name for your Delaware corporation.

When choosing a name for your Delaware corporation, make sure that it is not already in use by another company. You will also have to follow certain guidelines when picking your corporate name:

• Names should be easily recognizable as corporations. For example, you can’t call yourself “Ferocious Lions Inc.” because ‘lions’ aren’t usually considered to be corporations. Instead, try using words like “corporation,” “company,” or “incorporated” in your business’s name.
• Try not to use common terms that could lead people to believe they are dealing with an individual instead of a legal entity (for example: John Smith Corporation).

File Articles of Incorporation.

The next step is to prepare and file the Articles of Incorporation with the Delaware Division of Corporations. The process for filing the Articles of Incorporation is relatively simple, though it does require you to have access to a computer or other device that can create a PDF file.

The Articles of Incorporation must be filed by an incorporator—someone who has been appointed as such by all of your cofounders/owners. This person will also sign and submit the document on behalf of all other incorporators.

Appoint a registered agent.

• Check for a registered agent.
• Appoint a registered agent.
• What happens if you don’t have one?

Create corporate bylaws.

You need to create corporate bylaws. A set of rules and regulations that govern the day-to-day operations of your C corporation, bylaws are a key part of forming your company in Delaware.

Bylaws should include:

• The name and address of your corporation’s board of directors.
• How often they meet, when their meetings are scheduled, and how they’re conducted (e.g., via conference call or in person).
• Who can vote at meetings, who needs to be present before votes can take place, and how those votes are counted.
• Any other rules that may apply only to specific situations (e.g., special voting requirements for mergers).

Hold a meeting of the incorporators.

A meeting of the incorporators is a legal requirement for forming a C corporation in Delaware. The meeting must be held within 180 days from the date your articles of incorporation were filed with the State.

If you have called a meeting and no one appears or if there is no response to any notices that are sent out, then it can be assumed that there isn’t enough interest in your business venture anymore and so it’s safe to close down the company.

At this point, you can file an Application Withdrawing Articles Filed Under Section 204 Of The Delaware Code (PDF) with the Division of Corporations and pay $20 fee per form to dissolve your company and cancel its charter.

Issue stock certificates to the shareholders.

A stock certificate is a legal document that certifies that a shareholder owns a portion of the corporation. The certificate has a unique number, the name of the corporation, and the date it was issued. Stock certificates are signed by both officers (president and secretary) and registered agent. Once they’re notarized, they’re filed with the Delaware Division of Corporations to create an official record of ownership.

To issue stock certificates:

• Issue paper certificates to each shareholder in exchange for their investment in your company. These documents must be signed by all officers (president and secretary) as well as your registered agent before being notarized.* Once completed, file them with the Delaware Division of Corporations so that it can create official records of ownership within its system

Draft and sign a share purchase agreement.

Once you’ve decided to form a C corporation in Delaware, it’s time to draft and sign a share purchase agreement. A share purchase agreement is a contract between the shareholders and the corporation that outlines what each party will receive as payment for their shares (if any). It may also include other terms and conditions, such as restrictions on transferring shares or setting up an employee stock option plan.

Create and sign an employment contract or consulting agreement with the new CEO.

As CEO, it will be your responsibility to sign employment contracts or consulting agreements with the corporation on behalf of yourself and/or any other executives who are employees of the corporation.

This contract should contain a number of important provisions:

• An offer letter (which can be part of the consulting agreement) outlining the terms and conditions under which you will serve as CEO, including salary and benefits.
• A non-compete clause that restricts your ability to take another job in Delaware for a certain period of time after leaving this job (this is typically two years). You don’t want someone stealing their business from under them!
• A non-solicitation or poaching agreement that prevents employees from soliciting clients from their former employer once they leave that company’s employ—this ensures employee loyalty

Prepare the board of directors’ resolution to issue stock and approve the employment contract or consulting agreement with the new CEO, and sign this resolution.

You are now ready to prepare the board of directors’ resolution to issue stock and approve the employment contract or consulting agreement with the new CEO, and sign this resolution.

The board of directors is a group of people who oversee an organization and make decisions about its operations. The board members are chosen by shareholders for their skills, expertise and experience in running businesses like yours, which may include:

• Business management expertise (e.g., accounting)
• Industry-specific knowledge (e.g., construction)
• Financial expertise (e.g., banking).

Prepare the minutes of the first meeting of directors and sign them.

• Prepare the minutes of the first meeting of directors and sign them.
• The officers or directors who attended this meeting should sign and date these minutes within 30 days after they are adopted.
• The chairperson of this meeting also has to sign these minutes within 30 days after they were adopted, unless he was unable to do so because he was physically unable to attend. If that’s the case, then someone else who attended the meeting can sign as chairman in his place.
• Include a record of all persons present at your corporation’s initial board meeting if it took place in Delaware (or if Delaware is where you did most of your business).

Be sure you’ve filed all necessary documents to start your corporation properly

To be sure you’ve filed all necessary documents, it’s important to know the following:

• Be sure the documents are signed by your designated agent.
• Make sure you have the right information and that it is filled out correctly.
• Make sure all of your information is filed in the right place. For example, if you’re creating a C corporation in Delaware, make sure any filings go through this state’s Division of Corporations.
• Make sure that no two businesses have similar names (therefore avoiding confusion), especially if they operate in the same market or industry as yours would compete with it closely.

Conclusion

We hope this guide has been helpful and informative. If we can answer any other questions for you, please don’t hesitate to reach out!