Delaware C Corp Formation for Startups and Founders

What Delaware C corp formation is and who it is for

Delaware C corp formation means filing a Certificate of Incorporation with the Delaware Division of Corporations to create a stock corporation. The corporation is a separate taxpayer: it files Form 1120 and pays federal tax on its own profits at a flat 21%.

This service suits founders who plan to raise money from investors, join an accelerator, issue stock options to staff, or keep profits in the company to reinvest. It is also common with Indian and other non-US founders building software products for US customers. You do not need to live in Delaware: the state's FAQ says no, Delaware law requires every entity to have a registered agent in the state rather than requiring owners to live there.

Borderless Filings is a filing service and does not give legal advice. Share structure, investor terms and tax elections have legal and tax consequences, and we suggest you review them with a licensed attorney or tax adviser.

Why investors prefer a C corporation

Investors prefer C corporations because shares are easy to issue, price and transfer, and because the company's profits stay inside the company rather than flowing through to investors' own tax returns.

• Share classes: a corporation can issue common stock to founders and preferred stock to investors, which is how most venture rounds are structured.
• Stock options: employee option plans are built around corporate stock.
• No pass-through income: an LLC's income usually flows to its members, which many funds and their own investors want to avoid. A C corporation pays its own tax.
• Familiar law: Delaware corporate law and its courts are widely used by US investors and their lawyers, so documents and terms are familiar.

C corp or LLC for a non-resident founder

Choose a C corporation if you plan to raise equity funding, grant options or reinvest most profits. Choose an LLC if you run a services, ecommerce or freelance business, have no outside investors, and want to take profits out. A foreign-owned single-member LLC usually has no corporate-level federal income tax but files Form 5472 each year; a C corporation pays 21% on profits, and dividends paid to a non-resident shareholder are generally taxed at a flat 30% or a lower treaty rate. Our full LLC vs C corp comparison covers the trade-offs, and the entity quiz can help if you are still deciding. If an LLC is the better fit, see our US LLC formation service.

What is included and what is not

Included

• Name availability check with the Division of Corporations
• Preparation and filing of the Certificate of Incorporation, including authorized shares and par value
• Naming the registered agent: our registered agent service or an agent you already have
• Bylaws and an initial board consent template to appoint officers and approve founder share issuance
• The filed certificate delivered to your client portal
• Franchise tax and annual report reminders for 1 March each year

Not included

• The Delaware filing fee and any expedite fee, passed on at cost
• The EIN, which is our separate EIN application service
• Paying the franchise tax, filing the annual report and preparing Form 1120
• Filing an 83(b) election, securities filings, cap table management and investor documents
• Legal and tax advice

Delaware government fees

Delaware franchise tax basics

Every Delaware corporation must file an annual report and pay franchise tax, even if it has no revenue. There are two ways to calculate the tax, and you may use whichever gives the lower figure.

• Authorized Shares Method: $175 for 5,000 shares or fewer, $250 for 5,001 to 10,000 shares, and $85 for each additional 10,000 shares or part of 10,000.
• Assumed Par Value Capital Method: based on issued shares and total gross assets, at $400 per million dollars of assumed par value capital, with a $400 minimum.

Share numbers matter. Many startups authorize 10,000,000 shares. Under the Authorized Shares Method that gives $250 plus 999 steps of $85, or $85,165. The Assumed Par Value Capital Method usually produces a far lower figure for a young company with few assets, which is why founders who receive a large bill should recalculate before paying. Our Delaware franchise tax guide works through examples.

Federal tax: Form 1120 and the 21% rate

All domestic corporations must file Form 1120 whether or not they have taxable income, by the 15th day of the 4th month after the tax year ends (15 April for a calendar year). An automatic six-month extension is available with Form 7004, but it does not extend the time to pay. The late filing penalty is 5% of unpaid tax per month up to 25%, with a minimum for returns required in 2026 of the smaller of the tax due or $525 when a return is more than 60 days late.

If a foreign person owns at least 25% of the corporation, it is a reporting corporation and attaches Form 5472 to its Form 1120 to report transactions with related parties. The penalty for failing to file is $25,000. Read our Form 5472 guide for the details.

Like all US-formed companies, a Delaware corporation does not file a BOI report with FinCEN. See the BOI report guide.

The 83(b) election: discuss it with an adviser

If your founder shares vest over time, you may want to file a section 83(b) election, which changes when and how the shares are taxed. The IRS says the election must be filed no later than 30 days after the date the property was transferred, using Form 15620 or a written statement mailed to the IRS. The deadline cannot be fixed after it passes.

Whether the election helps you depends on your circumstances and, for a non-US founder, on how your home country taxes the shares. We do not advise on this. Speak to a tax adviser as soon as your shares are issued so the 30-day window is not missed.

How it works

1. Order and intake: tell us the company name, authorized shares, par value, directors, officers and founders.
2. Secure document upload: upload a passport copy for each director and officer through your portal.
3. Preparation and review: our filing team drafts the Certificate of Incorporation and you approve it.
4. Submission: we file with the Division of Corporations, with expedite if you choose it, and pay the state fee on your behalf.
5. Delivery: the filed certificate, bylaws and board consent template go to your portal.
6. Reminders: your 1 March franchise tax and annual report date and your Form 1120 date are added to your calendar.

What we need from you

• The corporation's name, ending in a word such as "Inc." or "Corporation", and two back-ups
• Number of authorized shares and par value (ask your adviser or investor if unsure)
• Names and addresses of the initial directors and officers
• Each founder's intended shareholding
• A passport copy for each director and officer
• Your registered agent choice

Timelines

Our team starts once your intake and documents are complete. Delaware does not publish a standard processing time; it offers 1-hour, 2-hour, same day and next day expedited services, and regular processing varies with volume. After incorporation, apply for the EIN, which non-residents do by fax, mail or phone.

Doing it yourself vs using our service

You can file a Certificate of Incorporation directly with the Division of Corporations online or by mail, using the state's own form, and appoint any Delaware registered agent. The filing is short. The mistakes that cost money come later: a share count that inflates the franchise tax, a missed 83(b) deadline, or a missed 1 March report. Our service prepares the filing, keeps your documents in one secure portal (see our security page) and tracks every yearly date, while leaving the legal and tax decisions with your advisers.

Ready to proceed? Start your Delaware C corp order.

Sources

• Delaware Division of Corporations: Fee schedule (revised 1 August 2026)
• Delaware Division of Corporations: Annual report and tax instructions
• Delaware Division of Corporations: How to calculate franchise taxes
• Delaware Division of Corporations: How to form a new business entity
• Delaware Division of Corporations: Frequently asked questions
• IRS: Instructions for Form 1120
• IRS: Instructions for Form 7004
• IRS: Instructions for Form 5472
• IRS: Form 15620, Section 83(b) Election
• IRS: Taxation of nonresident aliens

Fees, deadlines and rules on this page were last checked on 27 September 2026.