Start a Delaware C-corp: shares, APV, March 1
The venture-standard charter. The share count you authorize on day one drives your franchise-tax notice for years, and the deadlines in your first 30 days are the ones founders most often miss.
Step by step
- File the Certificate of Incorporation: $109 minimum. The fee in the Division's August 2026 schedule starts at $109 and rises with the number and par value of authorized shares. The certificate names the corporation, the registered agent, the authorized shares and par value, and the incorporator.
- Authorize shares deliberately. The common startup setup is about 10,000,000 shares of common stock at $0.00001 par. That count is fine: as long as you file franchise tax under the Assumed Par Value method, not the default Authorized Shares method (see below).
- Adopt bylaws and initial board consents electing directors and officers and approving founder stock issuances.
- Issue founder stock under stock purchase agreements, usually with vesting, and pay the purchase price (at $0.00001 par, often a few dollars).
- File 83(b) elections within 30 days of each restricted-stock grant. There is no extension and no fix after day 30: read the 83(b) guide.
- Get an EIN and open a bank account.
- Register in the state where you work. A Delaware corporation operating from California must qualify there and pays California's $800 minimum franchise tax from its second year (the first year is exempt for corporations) See foreign qualification.
How the franchise tax is calculated
Delaware sends every corporation a notice computed under the Authorized Shares method: $175 for up to 5,000 shares, $250 for 5,001–10,000, and $85 for each additional 10,000 shares. For 10,000,000 authorized shares that is $85,165: the number that panics first-time founders every February.
The Assumed Par Value (APV) method uses your gross assets and issued shares instead. Divide total gross assets by issued shares to get an assumed par; multiply by authorized shares to get assumed par value capital; tax is $400 for each $1,000,000 of that capital or any part of one, with a $400 minimum. A seed-stage company with 10,000,000 authorized, 8,000,000 issued, and $2,000,000 in gross assets has an assumed par of $0.25 and assumed capital of $2,500,000: three $1M units, so a tax of $1,200. With $100,000 in assets it pays the $400 minimum. Run your numbers in the Delaware calculator and see the APV walkthrough.
| Annual item | Amount | Due |
| Annual report filing fee | $50 | March 1 |
| Franchise tax | $175 / $400 minimum; $200,000 max | March 1 |
| Estimated tax (if $5,000+) | 40% / 20% / 20% / rest | June 1, Sept 1, Dec 1, March 1 |
| Late penalty | $200 + 1.5%/month | After March 1 |
Delaware income tax
Delaware's 8.7% corporate income tax applies only to income from business conducted in Delaware. A startup whose team, customers, and servers are elsewhere generally owes none. You still pay federal corporate tax at 21% and the income or franchise tax of every state where the company actually does business.
Corporation or LLC?
Choose the C-corp if you plan to raise venture capital, grant stock options, or might qualify for the federal small-business stock gain exclusion. If profits will flow to the owners and no investors are coming, an LLC is simpler and cheaper.