Form a S-Corp in Delaware
Everything you need to know about forming a 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 name for your corporation that includes a required designator such as 'Inc.', 'Corp.', 'Incorporated', or 'Corporation'. Use the Delaware Division of Corporations name search tool to confirm availability before filing.
30 minutes
Appoint a Delaware Registered Agent
Designate a registered agent with a physical street address in Delaware to receive legal and official documents on behalf of the corporation. The registered agent can be an individual resident or a registered commercial agent service.
1 hour
File Certificate of Incorporation
Prepare and file the Certificate of Incorporation with the Delaware Division of Corporations, either online or by mail, paying the $89 minimum filing fee. The certificate must include the corporate name, registered agent details, authorized shares, and incorporator information.
1-2 hours
Obtain an EIN from the IRS
Apply for a federal Employer Identification Number (EIN) through the IRS website at no cost, which is required to file taxes, open a business bank account, and complete the S-Corp election. This can typically be done online in minutes.
15-30 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-Corp Election — Submit IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax status; this must be filed no later than 2 months and 15 days after the start of the tax year in which the election is to take effect. All shareholders must sign the form, and the corporation must meet all IRS eligibility requirements including no more than 100 shareholders and only one class of stock.
- •Adopt Bylaws and Hold Organizational Meeting — Draft corporate bylaws to govern internal operations, then hold an organizational meeting of the initial board of directors to adopt bylaws, issue shares, elect officers, and handle other initial corporate matters. Bylaws are not filed with the state but should be kept in the corporate records book.
- •Fulfill Ongoing Compliance Requirements — Register for Delaware state taxes if applicable, open a dedicated business bank account, and ensure timely payment of Delaware's annual franchise tax and filing of the annual report by March 1 each year. If operating outside Delaware, you may also need to register as a foreign corporation in your home state.
Advantages
- ✓Pass-through taxation eliminates federal double taxation, with corporate income and losses flowing directly to shareholders' personal tax returns.
- ✓Delaware's Court of Chancery provides a sophisticated, well-developed body of corporate law and a dedicated business court with predictable rulings favored by investors.
- ✓Shareholders who are active in the business can reduce self-employment taxes by splitting income between a reasonable salary and S-Corp distributions.
- ✓Delaware corporations enjoy strong liability protection, shielding shareholders' personal assets from business debts and lawsuits.
Considerations
- •Delaware imposes annual franchise taxes and report fees regardless of revenue, and businesses operating outside Delaware must also register and pay fees in their home state, creating dual compliance costs.
- •S-Corps face strict IRS eligibility restrictions including a maximum of 100 shareholders, only one class of stock, and shareholders must be U.S. citizens or permanent residents, limiting flexibility for raising capital.
- •Delaware corporations must observe corporate formalities such as maintaining bylaws, holding annual shareholder and director meetings, keeping minutes, and issuing stock, which creates more administrative burden than an LLC.
Annual Obligations
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