What Other Steps Might You Need to Take?

There are a number of steps that you should take beyond incorporating or forming a limited liability company. You don't need to create your corporate by-laws or limited liability company membership agreement until after the certificate of formation is filed; however, please note that these documents are important! They, along with the applicable Delaware Code, are responsible for determining how your entity is governed. In fact, Delaware law now requires that all Delaware LLCs have an Operating Agreement.

Delaware Intercorp, Inc. recommends preparation and signing of the Company's by-laws or Operating Agreement as soon as possible. To the extent that you need assistance with the preparation and customization of either of these documents, we would be happy to provide you with a referral to a Delaware attorney.

What other factors should you consider when starting a new business?

When you're taking those first steps to create your company, you're going to find that it's a good idea to contact a number of other offices and agencies.

Here are some that you should look into:

Internal Revenue Service:

You need to investigate how the Internal Revenue Service will be involved when you first start out. You may interact with them in the domestic business formation process in a number of ways, possibly including one or more of the following three:

    1. You will probably need to apply for an EIN (Employer Identification Number). This requires both completing and filing form SS-4 with the IRS. Please note that Delaware Intercorp, Inc. will provide you with a blank form SS-4 with your initial corporate documentation and with each corporate kit..

      Actually obtaining an EIN for your business can be accomplished in a variety of ways:

      • Use a Third Party Designee to assist you in obtaining the EIN

      • If you are looking to save time, and to take some of the hassle out of the filing process with the Internal Revenue Service, this may be what you are looking for. Your accountant or a service provider may act as a Third Party Designee for obtaining an Employer Identification Number. Delaware Intercorp, Inc. offers the EIN Procurement Service for this specific purpose. While only you can complete the form SS4 we can take the time required to liaison with the IRS, assure it is submitted, and that an EIN is assigned to your business.

      • Obtain an EIN on your own

      • Alternatively, you may contact the IRS independently to obtain an EIN directly from them. Applicants representing foreign owned entities will need to call the Philadelphia office at 267.941.1099 to verbally provide all of the required information for submitting the SS-4. (In these circumstances, an applicant is not required to have a Tax ID number.) All other applications may be submitted online at www.irs.gov or via telephone at 800.829.4933.

        In most cases, the IRS will issue an EIN right over the phone. If the application is submitted online, an EIN is automatically generated.

      No matter how you choose to obtain it, an EIN is required to open a US Bank Account for your business entity.

      You will need to apply for an EIN number to make either of the following two elections below:

    2. Close corporations are popular for small business because of the “S” corporation election with the Internal Revenue Service. If you qualify, you can pay no income tax at the corporate level. All tax liability flows through to the shareholders' personal returns.

      Corporations with nonresident alien shareholders are not eligible for “S” Corp status. See the instructions for Form 2553 (pdf) and the actual IRS Form 2553 Election by a Small Business Corp (pdf) for the official details from the IRS.

    3. Please keep in mind that a Limited Liability Company (LLC) may elect to be taxed as a corporation or as a partnership using IRS Form 8832 (pdf), which is an Entity Classification Election. Review the instructions on page two of the form for more details.

      An LLC with two, or more, members is treated by the IRS, for tax purposes, as a partnership unless it makes an election to be treated as a corporation. An LLC with only one member will be treated, for tax purposes by the IRS, as a sole proprietorship. This allows for flow-through-taxation similar to that found in an “S” Corp. However, in some situations, election as a corporation may be appropriate.

Your Bank:

Opening a business bank account is highly recommended. Contact the bank, or banks, that you would consider opening an account with, and ask them what type of information they will require.

Many of them request documents which show that the company exists, such as a certified copy of the certificate of formation (or incorporation), or a certificate of good standing. The State of Delaware charges a fee for copies of these documents, and we can provide them to you with your order.

The bank will also need an EIN number for the company.

Other States Where You Will Be Conducting Business:

You must register as a foreign corporation in your local jurisdiction if you plan to do business there. The definition of “doing business” varies widely from state to state. The very general rule of doing business says if you have an office in the state, or an employee based in the state, then you are “doing business” in the state and must register as a foreign entity. As with any general rule, there are exceptions.

More information on what constitutes “doing business” can often be obtained at the office responsible for registration of domestic and foreign businesses in each state. Some states refer to this registration as filing a Certificate of Authority to conduct business in their state. Most states will require a Certificate of Good Standing from the Delaware Secretary of State. The Division of Corporations charges $50.00 ($175.00 if you need the long version) for this form.

Business Licenses, and Professional Licenses are also not uncommon requirements, and need to be applied for in the places where you will be conducting business. Different states, counties, and municipalities may all require business licenses, and you need to check with each to see if you are required to apply for a business license in all of the areas where you will be doing business. Likewise, professional, or occupational licenses, may be required in certain areas if that profession is one regulated under the laws of the jurisdiction where you will be conducting business.

You will also want to get a State Tax ID Number, and review your tax obligations under the laws of the states where you will be conducting business.

Laws governing corporations and limited liability companies vary widely from state to state. Visit our State Government and Business Resources pages, where we have gathered links to many state offices, to help you begin to find the information that you may need. Links to the business registration office, and the Division of Revenue/Taxation, for each state, as well as many other government offices, are provided.

You can also usually locate the Small Business Administration (SBA) for a state by looking through that state's government pages. The Small Business Administration can be an invaluable resource when you are first starting out in business, giving you the opportunity to talk one-on-one with someone who has been through the start-up process at least once or twice.

Other Countries Where You Will Be Conducting Business:

If you are going to be “doing business” outside of the United States, you may have to review the laws of the country, state, or province where you will be doing business, to see what is required of your company. Chances are that you will have to register as a foreign business, and file paperwork with a governmental agency.

Authentications, Apostilles & Legalizations

You may need a copy of the certificate of formation (or incorporation) or a certificate of good standing, and it will probably need to be legalized, or have an apostille attached to it. We can help you with apostilles, and legalization of documents, though the prices for legalizations vary depending upon the country, or countries, and the embassies involved.For more information on these services, please visit Delaware Intercorp's Authentication Services: Apostilles & Legalizations page.

U.S. Residency Certification from the IRS (Form 6166)

Many U.S. treaty partners require the IRS to certify that the person claiming treaty benefits is a resident of the United States for federal tax purposes. You must apply directly to the IRS for this certification (there is no third party option!). To learn more about this topic, please visit Delaware Intercorp's U.S. Residency Certification (IRS Form 6166) page.

The Rules:

Delaware has many advantages as a place to incorporate, ranging from the General Corporation Law to the flexibility built into the corporate formation process.

The General Corporation Law of the State of Delaware is also available online at the Delaware Division of Corporation's web site.

If you ever do get sued by a shareholder, your case may be tried in the state where you're incorporated. Knowing the rules will help you avoid lawsuits.

United States Patent and Trademark Office:

You may want to consider a trademark search to be sure you are not stepping on somebody’s toes. There are many reputable firms that will search the US Patent and Trademark Office without the use of an expensive patent attorney. You may want to consult a trademark search specialist before registering the name of your business in Delaware.

Trademark searches typically take 4-7 days. The process of obtaining a trademark can take 18 months. The search product must still be reviewed by a person knowledgeable about trademark law to determine if you are safe to proceed. Trademark infringement may be punishable by fines totaling up to twice the income generated by the use of the mark, beware.

The State of Delaware:

Some helpful information concerning the office of the Secretary of State of Delaware:

  • Address: Secretary of States Office, Division of Corporations, P.O.Box 898, Dover, DE 19903

  • General Questions: 302.739.3073 (can check names at this number)

  • Name Reservations are now handled online. We do not recommend you reserve the company name yourself. If you intend to use a filing firm like ours, we should reserve the name for you. Please call or e-mail us regarding all name reservations.

  • Corporate Status: Some of this information is now available online at the State website.

  • Franchise Tax: 302.739.4225

  • Uniform Commercial Code Filings & Notaries: 302.739.4279

Other Office Services:

Delaware Intercorp, Inc., offers a number of other office services to companies that have incorporated in Delaware with Delaware Intercorp as their registered agent. These include mail, fax, and phone forwarding, and procurement of a Delaware Business License. Visit our Delaware Business Services page for more details.

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