Misconceptions About Incorporating a Company
T
here are many factors that come into play when deciding to form a new Delaware company and sometimes, the apparent complexity can deter potential business owners from moving forward with the actual formation process. An individual may speak to multiple people or different agencies, receive various forms of feedback and information which then ultimately leads them to having more questions and potentially shying away from forming their own company.
In this blog, we would like to bring up some of the more frequent explanations we hear from clients when they’re on the fence about the company formation process.
One of the most common entrepreneurship myths that we hear is the assumption that only larger organizations can incorporate in Delaware. While it’s true many big-time entities form Corporations and LLC’s in Delaware, many start-up companies also like to get started in Delaware. For example, some small businesses might include e-commerce businesses that are operating from a home address temporarily. Or, perhaps, a cleaning service or a pressure washing company might also inquire about forming a Delaware company. Delaware continues to be one of the most popular states in which to form a company, large or small.
Second, clients sometimes think that they need a large amount of money to incorporate a company, but forming a Delaware company such as an LLC or Corporation is surprisingly inexpensive and the formation process is simple and straightforward. At Harvard Business Services, Inc., we can help you form an LLC or corporation online for a great price.
Another misconception regarding forming a Delaware company is that a client would need to have a physical Delaware address, which is simply not the case. Clients can form Delaware companies from all around the world, even if they plan to physically operate the company outside of Delaware/United States. When forming a Delaware company, the LLC or Corporation is required to appoint a Delaware based Registered Agent to receive and forward correspondence from the Delaware Division of Corporations to the company. A physical Delaware or U.S. address is not required to form and operate a Delaware company.
Clients also ask if incorporating will complicate their taxes. Corporations file their own tax returns both federally and locally, as required. In the early stages these can be quite simple with a tax program, but we still recommend that you connect with an accountant to prepare and file your taxes as the company gets larger.
These are just a few of the most common myths about starting a business, but there are certainly plenty more. We are happy to talk with you and answer your questions and assist you in forming your own company.
If you have any questions about forming a company in Delaware, feel free to contact us
at 1-302-645-7400 or 1-800-345-2677 ext. 6900 or via email at info@delawareinc.com. We can
also be reached via skype at delawareinc.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.