Form an S-Corp in Delaware
Everything you need to know about forming an S-Corp in Delaware. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Corporate Name
Select a unique business name that includes a required designator such as 'Corporation,' 'Incorporated,' 'Company,' or an abbreviation thereof. Verify availability using the Delaware Division of Corporations name search tool at corp.delaware.gov.
30 minutes
Appoint a Delaware Registered Agent
Designate a registered agent with a physical street address in Delaware who will accept legal documents and official correspondence on behalf of your corporation. The registered agent can be an individual resident or a registered commercial agent service.
1-2 hours
File Articles of Incorporation
Prepare and file the Articles of Incorporation with the Delaware Division of Corporations, including the corporation's name, registered agent details, number of authorized shares, and incorporator information. Filing can be completed online, by mail, or in person with the $89 minimum filing fee.
1-2 hours
Obtain an EIN from the IRS
Apply for a Federal Employer Identification Number (EIN) from the IRS, which is required for tax filings, opening business bank accounts, and electing S-Corporation status. Applications can be submitted online at irs.gov and are typically issued immediately.
30 minutes
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •File IRS Form 2553 for S-Corporation Election — Submit IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax status, ensuring all shareholders sign the form. The election must be filed no later than two months and 15 days after the beginning of the tax year in which the election is to take effect.
- •Adopt Corporate Bylaws and Hold Organizational Meeting — Draft and adopt corporate bylaws that govern internal operations, then hold an initial organizational meeting of the board of directors to appoint officers, authorize shares, and address other foundational matters. Bylaws are not filed with the state but must be maintained in your corporate records.
- •Register to Do Business in Your Home State (If Applicable) — If you are operating your S-Corporation primarily outside of Delaware, file for foreign qualification in your home state by submitting the required foreign corporation registration forms and fees to that state's Secretary of State. This allows you to legally conduct business in your operating state while remaining incorporated in Delaware.
Advantages
- ✓Pass-through taxation eliminates double taxation, with profits and losses flowing directly to shareholders' personal tax returns and avoiding federal corporate income tax at the entity level.
- ✓Delaware's Court of Chancery provides a highly sophisticated, predictable legal environment for corporate matters with centuries of established business case law favorable to corporations.
- ✓Shareholders who are active employees can reduce self-employment tax liability by splitting income between a reasonable salary and S-Corp distributions, potentially generating significant tax savings.
- ✓Delaware does not impose state income tax on corporations that are incorporated in Delaware but conduct business exclusively outside the state, making it attractive for multi-state businesses.
- ✓Delaware's flexible corporate statutes and strong privacy protections allow for streamlined governance and do not require public disclosure of officer or director names in the Articles of Incorporation.
Considerations
- •S-Corporations are subject to strict IRS eligibility requirements, including a maximum of 100 shareholders, only one class of stock, and shareholders must be U.S. citizens or permanent residents, limiting flexibility for growth and investment.
- •If your business operates primarily outside Delaware, you must register as a foreign corporation in your home state and comply with that state's requirements, resulting in dual compliance costs including two sets of filing fees, registered agent fees, and annual reports.
- •Delaware's franchise tax can be unexpectedly high for corporations with many authorized shares, and the calculation methods can be complex, potentially requiring professional accounting assistance to minimize the tax burden.
Annual Obligations
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