How do you set upa company in Delaware.
You file a certificate of incorporation with the Division of Corporations, appoint a Delaware registered agent and adopt bylaws. Teamed does all of it and runs the company afterwards.
Delaware at a glance
The facts most people need first
Delaware is the easiest state in America to put a company into and one of the least demanding to keep one in. Nobody has to live there, nobody has to travel there, and the filing is done electronically in a day or two. The costs are small and fixed, which is unusual, and the rules that catch people out are about shares and registered agents rather than about money.
- Usual company types
- Corporation or limited liability company
- Governing law
- Delaware General Corporation Law
- Directors needed
- One, with no residency requirement
- Registered agent
- Required, always, with a Delaware address
- Minimum share capital
- None
- Corporation annual report
- $50, due on or before 1 March
- Minimum franchise tax
- $175, due with the annual report
- LLC annual tax
- $400 flat, due on or before 1 June
- Corporate income tax
- 8.7%, and only if you do business in Delaware
What you are actually buying
Why so many companies sit in a state they have never visited
Delaware's pull is not its tax rate. It is the Court of Chancery, a court that hears business disputes without a jury and has been doing so since 1792. Judges there have decided so many corporate questions that the answers are largely known in advance, and a body of settled case law is worth more to a company than a small saving on fees.
The second reason is familiarity. Investors, acquirers and their lawyers read Delaware documents every day and know what the provisions mean. If you expect to raise money from American investors or be bought by an American company, a Delaware corporation removes a conversation that would otherwise have to happen. That is the real product.
Neither reason has anything to do with lowering a tax bill, which is the belief that brings most people to Delaware and the one worth dealing with directly.
The misunderstanding worth clearing up
Incorporating in Delaware does not move your tax
Delaware charges 8.7% on federal taxable income, and the words that matter in the rule are doing business in Delaware. A company incorporated in Delaware whose people, customers and offices are in another state generally owes Delaware nothing on its income. That sounds like the tax advantage everyone has heard about. It is not, because the same logic runs the other way.
Wherever your employees actually sit, that state will want you registered as a foreign corporation and will tax you under its own rules. Hire one person in California and you have California filings, California employer registration and California tax. The Delaware certificate does not travel with them. You end up with two states to keep current rather than one, which is a cost rather than a saving.
So the honest summary is that Delaware decides where your company exists on paper, and the work decides where it is taxed. People who incorporate in Delaware expecting the first to change the second are surprised twice, once by the foreign registration and once by the bill.
Before you file
What you need to have ready
Four things, and only one of them is difficult. You need a company name that is distinguishable from everything already on the register, a registered agent in Delaware, a certificate of incorporation, and a decision about authorised shares. The name can be reserved for 120 days if you are not ready, though most people simply file.
The registered agent is not optional and not a formality. Delaware law requires every business entity to have and maintain one in the state, either a resident individual or an authorised business, and it is how the state and the courts reach you. Because almost no Delaware company has anyone in Delaware, this is a service you buy every year for as long as the company exists, and the state does not set its price.
Authorised shares are where the money hides. Delaware lets you compute franchise tax two ways, on authorised shares or on assumed par value capital, and you pay the lower of the two. A founder who authorises ten million shares because it sounds like a sensible round number, and assigns no meaningful par value, can turn a $175 minimum into something very much larger under the first method. Getting the par value right at the point of filing costs nothing and is close to impossible to care about later.
Once it exists
The rhythm you are signing up to
Delaware asks very little of you, but it asks on fixed dates and it does not chase. Three deadlines cover almost every situation, and which one applies depends on what you formed and where it was formed.
| Entity | What is due | Deadline |
|---|---|---|
| Delaware corporation | Annual report $50 plus franchise tax, minimum $175 | On or before 1 March |
| Delaware LLC, LP or general partnership | Annual tax $400 flat, no report required | On or before 1 June |
| Foreign corporation registered in Delaware | Annual report $250 | 30 June |
The LLC figure is worth pausing on. It is $400, and a great deal of published guidance still says $300, because that is what it used to be. If you are budgeting from something you read rather than from the Division of Corporations, check it.
The part that does not go away
What stays with you after the filing
Incorporation is a morning's work. What follows is a standing obligation that outlives the enthusiasm that created it. Somebody has to keep the registered agent paid, file on 1 March or 1 June, and watch the franchise tax calculation as the share structure changes. The company also has to stay in good standing, so a future investor or buyer does not find a lapse in the file.
Add to that every state where you actually employ anyone, each with its own registration, its own payroll tax accounts and its own deadlines. The Delaware company is the simple half. The half that grows is the one nobody looks at when they decide to incorporate.
Before you commit
Sometimes an employer of record is the better fit
Not every team needs its own company. If the group in the United States is small, still changing shape, or you are testing whether the market works at all, an employer of record can be the better answer, and it is a fair one rather than a lesser one. It is also reversible in a way incorporation is not. A company brings directors, filings, a registered agent and a state tax footprint that all outlive the decision to open it.
Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue.
Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb. The point at which an entity starts to pay depends on what you pay people and how long you intend to stay.
Who carries it
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it.
In Delaware we are describing something we did ourselves. Teamed's American entity is Teamed US Inc., a Delaware corporation, so the annual report, the franchise tax calculation and the registered agent are filings our own team already makes on our own account every March.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Questions people ask before they file
Do you have to live in Delaware to incorporate there?
No. Delaware has no residency requirement for directors, officers or shareholders, and most Delaware companies have nobody in the state at all. What you must have is a registered agent with a Delaware address, and that is a paid service rather than a person you employ.
Does incorporating in Delaware lower your taxes?
Generally no, and this is the most common misunderstanding about Delaware. Delaware's 8.7% corporate income tax applies to companies doing business in Delaware. If your people and customers are in another state, you pay that state's taxes, and you also have to register there as a foreign corporation. Delaware changes where the company exists on paper, not where the work is taxed.
What does a Delaware company cost to keep open each year?
For a domestic corporation the floor is $225: a $50 annual report fee plus $175 minimum franchise tax, both due on or before 1 March. A Delaware LLC instead pays a flat $400 annual tax due 1 June. On top of either sits the registered agent fee, which Delaware law requires you to maintain and which the state does not set.
Why is my Delaware franchise tax bill so much larger than $175?
Almost always because of authorised shares. Delaware lets you compute franchise tax on the authorised shares method or the assumed par value capital method and pay the lower of the two. A company that authorised a large round number of shares without assigning a low par value can produce a startling bill under the first method, and the second usually fixes it.
Is a Delaware LLC cheaper than a Delaware corporation?
Not on the annual tax. An LLC pays a flat $400 a year against a corporation's $225 floor. The LLC's advantage is simplicity rather than cost, and the corporation's advantage is that investors expect it. Note the LLC figure rose from the $300 still quoted on a great many websites.
Where these figures come from
Sources
Every figure on this page was read from the State of Delaware's own pages on 17 September 2026. Fees and franchise tax come from the Division of Corporations, the formation requirements from its guide to forming an entity, and the 8.7% rate and the doing business test from the Division of Revenue.
Looking for a job in Entity Setup yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.