How to form a Delaware C corporation: 2026 founder guide

Forming a Delaware C corporation takes seven steps: file your Certificate of Incorporation, adopt bylaws, issue shares, sign IP assignments, file an 83(b) election, get an EIN, and open a bank account. If you use a formation service like looch Start, steps one through six happen in one business day.

This guide covers every step in plain terms, explains the documents VCs actually require and why, walks through the EIN path for founders who have no SSN or ITIN, and gives you an honest all-in cost comparison for year one and year two. It also covers where the Corporate Transparency Act stands now, because that rule changed in 2025.

Why Delaware, and why a C corporation

What makes Delaware different

Delaware is the default for venture-backed startups for four concrete reasons.

Court of Chancery. Delaware has a specialized business court with no jury trials. Disputes between founders, investors, and the company go to judges who have spent careers on corporate law. Outcomes are more predictable than in states with generalist courts.

Established case law. Over a century of Delaware corporate decisions means almost every question a startup faces has a legal precedent. That makes due diligence faster and cheaper for investors.

No income tax on out-of-state revenue. If your company is incorporated in Delaware but operates elsewhere, Delaware does not tax income earned outside the state.

Privacy. Delaware does not require founders, directors, or officers to be listed in the public Certificate of Incorporation. Only your registered agent's address appears in the public record.

Why VCs require a C corporation

Most institutional investors will not invest in an LLC or an S corporation. The reason is structural, not arbitrary.

A C corporation can issue multiple classes of stock. That matters because VCs invest through preferred stock, which carries rights that common stock does not: liquidation preferences, anti-dilution protection, pro-rata rights. An LLC cannot issue preferred stock in the same way.

A C corporation can have an unlimited number of shareholders of any type, including other corporations and funds. An S corporation cannot have a corporate shareholder. The moment a VC fund (which is an entity, not an individual) invests, S-corp status terminates automatically. More on that below.

C corporations are also the only entity type eligible for Qualified Small Business Stock (QSBS) treatment under IRC Section 1202. QSBS lets early investors and founders exclude a large share of their gains from federal tax if they meet the holding and company-size requirements. The One Big Beautiful Bill Act expanded this for stock acquired after July 4, 2025: the per-issuer exclusion cap rose to $15 million, and a tiered schedule now allows a 50% exclusion at three years, 75% at four years, and 100% at five years, per Section 1202 analysis from Perkins Coie. For stock acquired on or before that date, the prior rule (up to $10 million excluded after a five-year hold) still applies. Either way, this exclusion is a significant part of the early-stage investing math, and only a C corporation qualifies. QSBS figures index for inflation, so confirm the current cap and holding-period tiers with a tax advisor.

Finally, a clean Delaware C corporation cap table is what acquirers and their lawyers expect. It speeds up M&A due diligence.

C corp vs. S corp: What actually matters for founders

S-corp tax treatment is not inherently bad. It is the right choice for profitable, bootstrapped businesses where the founders want to reduce self-employment taxes by splitting income between salary and distributions. If you run a services firm with no intention of raising VC money, an S-corp election often makes sense.

But the mechanics of S-corp status make it incompatible with institutional funding. S corporations cannot have more than 100 shareholders. They cannot have non-US shareholders. They cannot have entity shareholders. They can only issue one class of stock.

The practical result: the moment a venture fund invests, your S-corp status terminates, usually involuntarily and mid-year, which creates tax complexity. The IRS does not grant grace periods for this.

If you think you might raise VC funding at any point, form a C corporation from day one. The cost of converting later (legal fees, restated cap tables, shareholder consent) is far higher than the cost of getting it right at formation.

What you need before you start

Choosing a company name

Your company name must be unique in Delaware and must include a corporate designator: "Corporation," "Incorporated," "Company," "Limited," or an abbreviation of any of those. You can check availability through the Delaware Division of Corporations Entity Search before you file.

One practical note: Delaware availability does not mean the name is available as a trademark or as a domain. Run both checks before you commit.

Appointing a registered agent

Every Delaware corporation must have a registered agent with a physical address in Delaware. This is not optional. The registered agent receives official state mail, service of process, and franchise tax notices on your behalf.

Using a registered agent also keeps your personal address out of the public record. The registered agent's address appears in your Certificate of Incorporation, not yours.

Registered agent services range widely in cost. looch Start includes registered agent service in the formation price, with renewal at $49 per year.

Deciding on share structure

How many shares you authorize and at what par value matters more than most first-time founders realize. Getting it wrong is not catastrophic, but amending your Certificate of Incorporation later requires a stockholder vote, Delaware filing fees, and attorney time.

Common starting points for early-stage Delaware C corporations: 10 million authorized shares of common stock at $0.0001 par value. This gives you room to issue founder shares, create an option pool, and issue preferred shares in a future round without amending the certificate.

If you have co-founders, decide the split before you file. Changing share allocations after the fact requires everyone's consent and generates paperwork.

The step-by-step formation process

Step 1: File the Certificate of Incorporation

The Certificate of Incorporation is the document that legally creates your corporation. You file it with the Delaware Division of Corporations. The state filing fee starts at a minimum of $89, per the Delaware Certificate of Incorporation form and fee schedule, and rises with your authorized share count and document length. Expedited filing costs more; same-day state filing carries a higher fee.

The certificate must include your company name, your registered agent's name and Delaware address, and the authorized share structure. Everything else is optional at this stage.

Once the state stamps and returns the certificate, your company exists.

Step 2: Adopt bylaws and hold your organizational board consent

Bylaws govern how your corporation operates: how board meetings are called, how decisions are made, how officers are appointed. They are not filed with the state but must be adopted by the board.

The organizational board consent is a written action that formally adopts the bylaws, appoints officers, authorizes the issuance of shares, and ratifies the formation. This happens on paper (or electronically); no in-person meeting is required.

Step 3: Issue founder shares via a Stock Purchase Agreement

The Stock Purchase Agreement (SPA) is the contract between the company and each founder that documents who receives how many shares, at what price, and under what conditions. This is the legal record of your ownership.

Without a signed SPA, your ownership is informal. If a co-founder leaves, you have no documented basis for a repurchase. If an investor asks for a cap table, you have no clean document to provide.

Most early-stage SPAs include a vesting schedule (typically four years with a one-year cliff) and a repurchase right that lets the company buy back unvested shares if a founder leaves. This is standard. Investors expect it. A founder who pushes back on vesting is a yellow flag in due diligence.

The consequence of skipping the SPA: your ownership exists only in the Certificate of Incorporation as an authorized-but-unissued pool. You have not actually received shares. That creates ambiguity that every serious investor will require you to clean up before they wire money.

Step 4: Sign IP Assignment agreements

The IP Assignment (also called a Proprietary Information and Inventions Agreement, or PIIA) is the document by which each founder assigns to the company any intellectual property they created that is relevant to the business, including work done before the company was incorporated.

If you built a prototype before incorporation, wrote code, designed a product, or created any asset that the company is going to use, that IP technically belongs to you personally unless you assign it. Investors will ask for evidence that the company owns its own IP. If it does not, you have a hole in due diligence that can delay or kill a deal.

The IP Assignment covers past work (a retroactive assignment of anything you made before formation that is relevant to the business) and future work (an ongoing obligation to assign new IP you create in your capacity as a founder or employee). Both parts are standard and expected.

The consequence of skipping the IP Assignment: an investor's counsel will find the gap in due diligence. You will be asked to sign retroactive assignments, which raises questions about what was created when and whether there are disputes. Best case, it delays closing. Worst case, a co-founder refuses to sign after they have left the company.

Step 5: File your Section 83(b) election

This is the most time-sensitive step, and the one most founders do not understand until they have already missed it. Read this section carefully.

What an 83(b) election is. When you receive shares subject to a vesting schedule, the IRS treats each vesting event as ordinary income. Without an 83(b) election, you pay income tax on each tranche of shares as they vest, at whatever the fair market value is on that vesting date. If the company has grown, that tax bill can be significant, and you pay it in cash even though you have not sold anything.

An 83(b) election is a notice you file with the IRS telling them you want to be taxed on the full value of the shares at grant, not at vest. For a newly formed company, the fair market value at grant is essentially zero (or very close to it), so the tax owed at grant is also essentially zero. You lock in the lowest possible tax basis on day one.

Why the deadline is non-negotiable. You have 30 calendar days from the date shares are granted to file the 83(b) election. There are no extensions. The IRS does not grant exceptions for founders who missed the deadline because they did not know about it. If you miss it, every future vesting event is a taxable income event at the then-current fair market value. By the time your shares have appreciated meaningfully, that tax bill can be material.

The current form. The IRS released a standardized Form 15620 for 83(b) elections in late 2024, and in mid-2025 it added an option to file the form electronically through the IRS online account, which uses an ID.me login. Before Form 15620, founders had to draft a letter that met IRS requirements. The standardized form reduces errors, and you can still file by mail. The 30-day deadline is unchanged.

What looch provides. looch includes a completed 83(b) election draft in your formation package. You must file it yourself with the IRS (and keep a copy). looch does not file it on your behalf, but having the draft ready on day one removes the main source of delay.

The consequence of skipping the 83(b) election. If you miss the 30-day window, your unvested shares become phantom income at each vesting event. You will owe ordinary income tax on the appreciated value of shares you cannot sell yet. For a startup that has raised a Series A at a significant valuation, this can mean a six-figure personal tax bill on paper gains. The only remedy is to pay it.

Step 6: Get your EIN

An Employer Identification Number (EIN) is your company's federal tax ID. You need it to open a business bank account, hire employees, and file taxes. The IRS issues EINs at no cost.

US founders with an SSN or ITIN. Apply online at IRS.gov. The online portal issues your EIN immediately upon completion. The process takes about 15 minutes.

Non-US founders without an SSN or ITIN. The IRS online portal requires an SSN or ITIN and is not available to non-resident foreign nationals who have neither. The correct path is to fax Form SS-4 to the IRS. The IRS typically returns an EIN by fax within approximately four business days.

The document the IRS sends back is called a CP-575 letter. Keep it. Banks require the CP-575 (or the IRS 147C letter, which you can request if you lose the CP-575) to open a business account. A screenshot or informal EIN confirmation is not sufficient for most banks.

looch handles the fax EIN process for non-US founders who have no SSN or ITIN. For more detail on this path, see our guide to getting an EIN as a non-US founder.

Step 7: Open a business bank account

Once you have your EIN and your stamped Certificate of Incorporation, you can open a business bank account. Most banks also ask for your bylaws and a board resolution authorizing account opening.

Do not use a personal account for business transactions. Commingling funds is the fastest way to lose the liability protection your corporation provides.

A note on Beneficial Ownership Information (the rule that changed)

Older formation guides list a final step: file a Beneficial Ownership Information (BOI) report with FinCEN (the Financial Crimes Enforcement Network) under the Corporate Transparency Act. That requirement changed in 2025.

In an interim final rule issued in March 2025, FinCEN removed the BOI reporting obligation for companies created in the United States and for US persons. As of this writing, a domestic Delaware C corporation and its US beneficial owners are not required to file an initial BOI report, or to update or correct a previously filed one. Foreign companies registered to do business in the US can still have obligations.

This is the current state, but it sits on an interim rule that FinCEN has signaled it intends to finalize, so it can change again. Confirm the live requirement on FinCEN's official BOI page before relying on it.

What "VC-ready" actually means at formation

Most formation guides list the documents you need. Few explain what they do or what happens if you skip them. This section is the plain-language version.

Stock Purchase Agreement: The record of your ownership

The SPA is not a formality. It is the contract that proves you own your shares. It defines your vesting schedule, the company's repurchase right if you leave, and any restrictions on transfer.

Without it, your shareholding is undocumented. When an investor asks for a fully diluted cap table with supporting documentation, you need signed SPAs for every founder. If you do not have them, the first thing an investor's lawyer will ask is why, and the second thing they will do is require you to execute retroactive agreements, which raises questions about whether all founders will cooperate.

Get SPAs signed at formation, dated the same day as share issuance.

IP Assignment: Why investors will not close without it

The IP Assignment does one thing: it transfers ownership of relevant intellectual property from the founder personally to the company.

Here is the problem it solves. You had an idea, built something, maybe even had customers, before you formally incorporated. All of that work belongs to you personally, not to the company, unless you sign an assignment. The company is a new legal entity with no IP of its own unless founders transfer it.

Every investor's standard due diligence checklist includes: "Do all founders have signed IP assignment agreements?" If the answer is no, the investor knows the company does not actually own what it is selling. That is a deal-stopper.

The IP Assignment also covers future work. As a founder, anything you build in your capacity as a founder or employee of the company should belong to the company, not to you personally. The assignment makes that clear in writing.

83(b) election: The tax move you have 30 days to make

See Step 5 above for the full mechanics. The summary: without an 83(b) election, vesting shares become taxable ordinary income at each vest date, at whatever the stock is worth then. With it, you lock in a near-zero tax basis on day one.

The stakes: if your company raises a Series A at a $10 million valuation and your shares vest after that, you could owe income tax on several hundred thousand dollars of paper gains per vesting event, in cash, before you have sold a single share.

File it within 30 days of share grant. There are no exceptions.

Delaware ongoing requirements

Annual franchise tax

Every Delaware corporation owes an annual franchise tax, due by March 1 each year for the prior calendar year. Delaware calculates the tax using two methods: the Authorized Shares Method and the Assumed Par Value Capital Method. You pay whichever is lower. Per the Delaware Division of Corporations franchise tax FAQ, the minimum is $175 and the maximum is $200,000. Delaware adjusts these from time to time, so check the current figures when you file.

Most early-stage startups with a standard 10-million-share structure owe near the minimum under the Assumed Par Value Capital Method because their paid-in capital is low. The Authorized Shares Method will produce a much higher number for the same company; always check both.

Franchise tax is separate from any Delaware income tax. The franchise tax is owed regardless of whether the company has revenue.

Late franchise tax payments accrue interest. If the tax goes unpaid, Delaware can void the company's good standing, which can block you from raising money, opening accounts, or entering contracts that require a good-standing certificate.

Registered agent renewal

Your registered agent must be renewed every year to maintain your Delaware registration. Cost varies by provider. looch Start renews at $49 per year, which also covers your virtual office business address and mail scanning for up to 3 pieces per year, with unlimited state mail and service of process.

What it costs, all-in (year 1 and year 2+)

Breaking down the real cost

A Delaware C corporation requires at minimum: the Delaware state filing fee, a registered agent (year 1 and renewal), and an EIN (free from the IRS). VC-ready formation also requires the three documents described above: stock purchase agreement, IP assignment, and an 83(b) election draft.

Many formation services charge separately for each document, or do not include them at all. That is the gap to watch.

How looch Start compares

The looch figures and the Bizee, LegalZoom, and ZenBusiness figures below come from looch's own published /start comparison. The Stripe Atlas and Clerky figures come from those providers' public pricing.

looch is the lowest credible all-in number that includes all three VC-gating documents. Clerky includes them in its lifetime package but at more than three times the price, and still charges separately for its registered agent. Stripe Atlas, Bizee, LegalZoom, and ZenBusiness do not include an 83(b) draft, IP assignment, and stock purchase agreement in their base packages. Bizee, LegalZoom, and ZenBusiness also renew the registered agent well above looch's $49.

Provider pricing changes over time, so verify current figures before you commit.

What the looch Start price includes

looch's $249 formation package is all-in with no upsells. It covers the Delaware state filing fee, registered agent service and virtual office for year one, EIN filing (including the fax path for non-US founders without an SSN or ITIN), the company stock purchase agreement, the IP assignment agreement, and the 83(b) election draft. The virtual office includes a business address and mail scanning for up to 3 pieces per year, with unlimited state mail and service of process. If you later decide S corp tax treatment is the better fit, you can make that election in-app at any time at no cost.

See what's included on the looch pricing page.

What happens after formation (the workflow most guides skip)

Most formation guides end when your Certificate of Incorporation comes back from the state. That is not where the work ends.

After formation, you need to: confirm your EIN, set your cap table in a cap table tool, file your BOI report with FinCEN, open a business bank account, and start tracking transactions. If you have employees or contractors, you need payroll and 1099 workflows.

looch puts all of this in one app. You form, bank, and run your financials without switching tools. Once your company is formed through looch Start, your bank account is ready to open in the same session.

Frequently asked questions

Can a non-US founder form a Delaware C corporation?

Yes. Delaware has no residency or citizenship requirement for incorporators, directors, or officers. The only Delaware-specific requirement is a registered agent with a physical Delaware address. A non-US founder can own 100% of a Delaware C corporation from anywhere in the world.

Do I need a US address?

No. Your company needs a Delaware address for the registered agent, but that is the registered agent's address, not yours. You do not need a personal US address to form, own, or operate a Delaware C corporation.

How long does formation take?

With looch, your Certificate of Incorporation is filed within one business day. Your EIN is issued the same day if you have an SSN or ITIN. If you are a non-US founder without an SSN or ITIN, EIN processing via fax takes approximately four business days after looch submits Form SS-4.

What if I miss the 83(b) deadline?

There is no extension and no exception. If you miss the 30-day window from the grant date, every future vesting event is a taxable income event at the then-current fair market value. The IRS has granted relief in only a handful of documented cases, and those involved specific procedural errors, not founders who were simply unaware of the deadline. File the 83(b) within 30 days of receiving your shares. Do not wait.

When should I elect S-corp tax treatment instead?

S-corp tax treatment makes sense if you are running a profitable, bootstrapped company with no plans to raise institutional capital, and you want to reduce self-employment taxes by paying yourself a reasonable salary with distributions above that. The math on S-corp tax savings is real.

It does not make sense if you plan to raise VC funding. S-corp status terminates automatically the moment an entity (like a VC fund) becomes a shareholder, or when preferred stock is issued, or when you exceed 100 shareholders or take on a non-US shareholder. The termination is involuntary and creates tax complexity mid-year. If VC funding is in your plans, form a C corporation.

What is the Delaware franchise tax?

Every Delaware corporation owes an annual franchise tax due March 1. The amount depends on your share structure and capital, and Delaware lets you pay the lower of two calculation methods. The current minimum is $175 and the maximum is $200,000. Use the Delaware Division of Corporations franchise tax calculator to compare both methods for your share structure.

Ready to form?

Everything above, the Certificate of Incorporation, bylaws, board consent, stock purchase agreement, IP assignment, 83(b) draft, and EIN, is included in one package. Form your Delaware C corporation with looch and your paperwork is filed within one business day.