Corporations Law: Forming a Corporation

Forming the Corporation

An initial question facing those forming a corporation is the choice of the state in which to incorporate.

Del. § 101. Incorporators; how corporation formed; purposes.

1. Any person, partnership, association or corporation…may incorporate or organize a corporation under this chapter by filing with the Division of Corporations in the Department of State a certificate of incorporation in accordance with § 103.
2. A corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes, except as may otherwise be provided by the Constitution or other law of this State.

§ 102. Contents of certificate of incorporation.

1. The certificate of incorporation shall set forth:

1. The name of the corporation, which (i) shall contain 1 of the words “association,” “company,” “corporation,” “club,” “foundation,” “fund,” “incorporated,” “institute,” “society,” “union,” “syndicate,” or “limited,” (or abbreviations), or words (or abbreviations) of like import of foreign countries or jurisdictions…[and which] (ii) shall be such as to distinguish it upon the records in the office of the Division of Corporations in the Department of State from the names on such records of other corporations…organized, reserved or registered…under the laws of this State.
2. The address (which shall include the street, number, city and county) of the corporation’s registered office in this State, and the name of its registered agent at such address;
3. The nature of the business or purposes to be conducted or promoted. It shall be sufficient to state, either alone or with other businesses or purposes, that the purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware, and by such statement all lawful acts and activities shall be within the purposes of the corporation, except for express limitations, if any;
4. If the corporation is to be authorized to issue only 1 class of stock, the total number of shares of stock which the corporation shall have authority to issue and the par value of each of such shares, or a statement that all such shares are to be without par value. If the corporation is to be authorized to issue more than 1 class of stock, the certificate of incorporation shall set forth the total number of shares of all classes of stock which the corporation shall have authority to issue and the number of shares of each class and shall specify each class the shares of which are to be without par value and each class the shares of which are to have par value and the par value of the shares of each such class.
5. The name and mailing address of the incorporator or incorporators (usually lawyer that drafts and files all the documents);
6. If the powers of the incorporator or incorporators are to terminate upon the filing of the certificate of incorporation, the names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and qualify.

2. In addition to the matters required to be set forth in the certificate of incorporation by subsection (a) of this section, the certificate of incorporation may also contain any or all of the following matters:

1. Any provision for the management of the business and for the conduct of the affairs of the corporation, and any provision creating, defining, limiting and regulating the powers of the corporation, the directors, and the stockholders, or any class of the stockholders…if such provisions are not contrary to the laws of this State. Any provision which is required or permitted by any section of this chapter to be stated in the bylaws may instead be stated in the certificate of incorporation;

5. A provision limiting the duration of the corporation’s existence to a specified date; otherwise, the corporation shall have perpetual existence;
6. A provision imposing personal liability for the debts of the corporation on its stockholders or members to a specified extent and upon specified conditions; otherwise, the stockholders or members of a corporation shall not be personally liable for the payment of the corporation’s debts except as they may be liable by reason of their own conduct or acts;

3. It shall not be necessary to set forth in the certificate of incorporation any of the powers conferred on corporations by this chapter.

After the articles of incorporation have been prepared, they must be signed, delivered to the appropriate state official, and the required fees or taxes paid. The incorporators then receive a certified copy of the “certificate of incorporation”.

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