You’ve decided to start a small business in Delaware. Where do you start?
When it’s time to start a small business, you’ve probably heard that there are benefits
of incorporating in Delaware. But your decision should be based on carefully considered
factors that relate to your specific situation, not popular opinion.
We’ve collected information on all kinds of small businesses in Delaware so that
you can review the information and make the best decision for you.
Incorporate in Delaware
If you’re thinking about incorporation, you might consider a C Corporation. The
ownership structure allows for the C corporation to be owned by individuals, who
may or may not be US citizens, or other business entities.
Delaware S Corporation
An S Corporation is similar to a C corporation—it’s a legal entity, affording
the same limited liability to its owners—but it gives up its flexible ownership
structure in favor of a more favorable tax structure.
Delaware LLC
A Delaware LLC is a different type of incorporated entity, enjoying some of the
benefits of an S corporation and other benefits of a partnership. As the IRS does
not allow an LLC tax classification, you have options as far as taxation.
Foreign Corporation in Delaware
If you’ve already registered your corporation or LLC in another state, you might
decide to expand by registering your existing business as a Delaware Foreign Corporation.
This allows you to do business legally in Delaware and stay compliant with the Secretary
of State’s Corporations Division.
Nonprofit Corporation in Delaware
Forming a Delaware 501c3 Nonprofit Corporation is a two-step process. First, you’ll
submit your Articles of Incorporation to the state, thereby forming a nonprofit
corporation. Them, you’ll obtain the 501c3 status from the IRS through a series
of paperwork. Only certain business purposes, such as religious, charitable, educational,
or scientific, can enjoy the tax benefits of a 501c3 nonprofit corporation.
Trade Names in Delaware
If you’re not quite ready to incorporate, of if your startup capital requirements
don’t require you to obtain a loan, you might find that a Delaware DBA is the perfect
entity type for you.