Incorporating Your High-Growth Startup with Wescribe
On-demand Incorporation and Post-Incorporation Setup, the Way VCs Expect.
We’re building a suit of software tools for high-growth technology companies to quickly and easily mange their legal paperwork. Wescribe offers an affordable option to incorporate your business and manage post-incorporation setup the way VCs expect from potential portfolio companies. For $50, we’ll file the paperwork to incorporate your business in Delaware. For another $25, we’ll file the paperwork to register your corporation in your home state. And for another $50, we’ll gather the necessary signatures on post-incorporation documents to take post-incorporation steps that investors expect, such as bylaw adoption and board appointments.
This Incorporation guide will walk you through simple, economical options to incorporate your business in Delaware and register as a foreign corporation in the state in which you are doing business. Forming in Delaware is the preferred method for tech companies with aspirations for high growth for a variety of reasons, but the most important one is that venture capitalists have come to expect it. If you aspire to take on outside investment down the road, you’ll probably want to incorporate in Delaware. Our Certificate of Incorporation has the terms VCs expect, while also being the most cost-effective option for young, cash-strapped companies. That said, there are a number of good reasons not to incorporate in Delaware (as you’ll see, the fees can add up quickly), and forming as an LLC in your home state is a viable option for some companies, as it demands less formalities and can save on fees.
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We’ve studied common forms and contracts from top Silicon Valley firms like Cooley, Gunderson, Orrick and Perkins Coie to develop standard documents with clauses necessary for a young, high-growth company. Additionally, we’ve leveraged the resources available to us at Northwestern University School of Law to understand what entrepreneurs need. Through this process, we’ve developed the following documents, that any tech company looking to incorporate should feel comfortable using:
- Delaware Certificate of Incorporation
- Foreign corporation registration forms for CA, IL, and NY
- Action of Incorporator
- Action by Unanimous Consent of the Board of Directors
- Restricted Stock Purchase Agreement(s)
- 83(b) Elections
Click here to start the incorporation process, or start a chat with us in Messenger.
For a flat $50 fee, Wescribe will file your Certificate of Incorporation in Delaware and sign you up for registered agent services in Delaware.
For another $25, we will file your foreign corporation registration in your home state, another legal requirement for a newly incorporated company. We currently offer this service for California, Illinois, and New York. While the Illinois qualification is a separate form, Californians and New Yorkers will have this option a the end of filling out the Delaware Incorporation form.
And for another $50, we’ll send you our post-incorporation package, including the remaining documents (see below for details and link).
The steps this guide walks you through include the following fees:
- $50 Delaware registered agent (yearly fee)
- $198 to incorporate in Delaware ($98 submission fee + $100 for two certified copies of your certificate of incorporation)
- Registering as a foreign corporation fees vary by state:
- California: $100
- Illinois: $175 (minimum)
- New York: $225
Total Fees to Incorporate and Register as a Foreign Corporation:
- California = $348
- Illinois = $423
- New York = $473
Naming Your Corporation
Before deciding on a name, you’ll want to check in the state’s entity database to see if the name is available. If you’d like (though it’s not required), you can reserve a name through this site before you decide to actually incorporate your business. You’ll need to add a suffix to your business name as well. The allowed suffixes for corporations in Delaware are:
- Inc., Inc, Incorporated
- Corp., Corp, Corporation
- Co., Co, Company
- Ltd., Ltd, Limited
- Association, Assoc.
When filling out the Certificate of Incorporation, be sure to write the company name exactly as you intend it to be filed with the state. Note that you’ll also want to check in the state in which you’re doing business to make sure your name doesn’t conflict with another company’s so that you don’t run into problems when running registering as a foreign corporation. State corporation/LLC name databases for: California, Illinois, and New York.
Getting a Registered Agent
Since the Certificate of Incorporation must name a registered agent for the corporation, Wescribe will also sign your new corporation up for registered agent services.
Your registered agent must be physically located in Delaware, and is responsible for receiving legal and government communications for the corporation. Harvard Business Services is the cheapest, most reliable registered agent we’ve found (at $50 per year) so that’s who we guide our users to when incorporating. We can either automatically sign you up for HBS’s services on your behalf (at no additional cost to you) or you can sign up through delawareinc.com independently.
A Registered Agent is the liaison between your company and the state in which it is incorporated. In Delaware, your Registered Agent is your intermediary with the state of Delaware’s Division of Corporations. Delaware Registered Agents are responsible for receiving and forwarding legal documents and correspondence from the Delaware Division of Corporations to clients in a timely fashion. Some examples of documents received and forwarded are franchise tax reports, late notices, void notices from the Secretary of State and service of process for legal actions against your company. It is Delaware law that every company MUST have a registered agent in the state.
Next, you’ll see that the Certificate of Incorporation we’ve provided authorizes 10,000,000 shares of your company at $.00001 par value. If you wish to change the authorized shares or par value, be sure to check the associated filing fees on Delaware’s Division of Corporations website (e.g. fees can accrue rather quickly if you issue stock with no par value — download the Excel spreadsheets at the above link to see for yourself).
Other Key Provisions
The Certificate of Incorporation we provide has four more articles, which provide for the following:
- Management. Article 5 states that a Board of Directors will manage the affairs of your corporation. It also eliminates the possibility of cumulative voting when shareholders elect directors to the board. This simply means that a board members will be elected by a plurality of voting shareholders, as provided in Delaware General Corporation Law 216.
- Liability. Article 6 limits the personal liability of directors for breach of fiduciary duty, as allowed by Delaware law. This simply means that directors will not be held personally liable if they’re found guilty of breach of fiduciary duty. Section (B) of Article 6 gives the corporation the ability to indemnify (i.e. compensate) directors should they be brought to suit in their capacity as a director of the corporation. These provisions are crucial to ensure your directors feel protected against any potential lawsuits brought against them in conjunction with their duties as a director.
- Forum. Article 7 states that the Delaware Court of Chancery will be the forum in which any legal action is brought against the company or its stakeholders. One of the reasons Delaware is a preferred state of incorporation is its friendly, speedy, and well-developed chancery court, so it is important to declare Delaware as your company’s forum should any legal action arise.
- Amendments. Article 8 gives the corporation the ability to alter or amend the Certificate of Incorporation.
- Other. If you look at other templates, you may find other boilerplate articles added to a corporation’s certificate of incorporation. We’ve provided the essential ones; consult an attorney if you’d like to see if other clauses should be added for your specific corporation.
Obtaining a Certified Copy of Your Incorporation Documents
In the comments section of the filing cover sheet, you’ll likely want to request a Certificate of All Charter Documents or a Certificate of Good Standing, a simple document which proves that you filed for incorporation in Delaware. Many banks will require this certificate when opening a bank account. Check with your bank to determine whether additional information is required to establish a business account with them. This Certificate comes with a $50 fee.
Since your business probably isn’t actually located in Delaware, you’ll likely also need a Certificate of Good Standing to register as a foreign corporation in your home state. For example, if your main office is in California, you’ll have to register as a “foreign corporation” in California after incorporating your business in Delaware. Like the Certificate of All Charter Documents, a Short Form Certificate of Good Standing comes with a $50 fee.
Submitting Your Certificate of Incorporation
Finally, you may either mail or fax in your completed request to the Delaware Division of Corporations. The fax number is 302–739–3812. The mailing address is Division of Corporations -John G. Townsend Building — 401 Federal Street — Suite 4 — Dover, DE 19901. All filing fees must be paid upon submission of your request. All requests are returned regular First Class mail unless a Federal Express or UPS account number is provided to our office. More information can be found at the Delaware Division of Corporations website. While we’ve outlined all the fees you’ll have to pay in this guide, you can find a fee schedule here.
You’ll be paying $198 to Delaware upon submission of your Certificate of Incorporation. The fee breakdown is as follows:
- $89 state filing fee + $9 fee for each additional page of your Certificate of Incorporation (the document we offer is 2 pages, meaning you’ll pay $108 upon submission.
- $100 for two certified copies of Certificate of Incorporation (recommended — one for registering as a foreign corporation in your home state, one for your bank when opening an account)
- Any fees for additional Certificate of Good Standing ($50 for each short form Certificate requested). These are recommended if you’ll be registering as a foreign corporation in another state (e.g. where your home office is located.
Once filed, the Delaware Secretary of State will take about a week to process your paperwork. If you need it done more quickly, there are expedite options available, for an increased fee.
Registering as a Foreign Business in Your Home State
Congratulations! You’ve incorporated your business in Delaware. But odds are, your business isn’t actually located in Delaware. You know what this means, right? More paperwork! You’ll need to register your business in your home state as a foreign entity since its incorporated out of state. States have different definitions for what qualifies as “doing business,” but if you’ve got an office in a state, it’s a safe bet you’re “doing business” there and will need to register your corporation.
In California, you’ll have to fill out and submit the Statement & Designation by Foreign Corporation. With this form, you must also include a Certificate of Good Standing from Delaware (certified within the last 6 months). This can be requested from the Delaware Division of Corporations by submitting this form. This form must be submitted to the same fax number or address provided under the “Submitting Your Certification of Incorporation” section.
Where to submit: Completed forms along with the applicable fees be mailed to: Secretary of State, Business Entities Filings Unit, P.O. Box 944260, Sacramento, CA 94244–2260 or delivered in person (drop off) to the Sacramento office, 1500 11th Street, 3rd Floor, Sacramento, CA 95814.
Fee: $100 for a corporation
Where to submit:
Secretary of State, Business Entities Filings Unit, P.O. Box 944260, Sacramento, CA 94244–2260
Note that the California Foreign Qualification form (Form Form S&DC-S/N) asks for a registered agent in the state of California. Since your business is located in California, you can act as your own registered agent in California, but there are a few reasons you may not want to:
- You don’t maintain normal business hours
- Your address is likely to change
- The registered agent’s address becomes part of the public record
Sure, you can use your home address as your registered office (i.e. registered agent’s address), but this article provides a few reasons why you might want to think twice before doing that. And yes, the registered agent’s address can be the same as the corporation’s address. You can NOT use a PO box as the address. There are also a few alternatives for getting a real street address for your business, if you need one. This can be a cheaper option than hiring a registered agent:
- USPS. Head to this page of the USPS website and register for a PO box (this process can also be done in person). You can then submit this form to obtain a physical address instead of a PO box number.
- UPS. Similarly, you can head to your local UPS store and get a physical address. More information can be found here.
- Earth Class Mail. For a more expensive “virtual option,” you can use a service like Earth Class Mail, which will scan your physical mail and email it to you. Plans start at $99/ year.
If you Google, you’ll find a variety of companies offering registered agent services in California, for as low as $39 per year.
Click here to begin the Illinois Foreign Qualification process.
In Illinois, you’ll have to fill out Form BCA 13.15, With this form, you must also include a Certified Copy of your Delaware Certificate of Incorporation (certified within the last 90 days). This can be requested from the Delaware Division of Corporations by submitting this form. This form must be submitted to the same fax number or address provided under the “Submitting Your Certification of Incorporation” section. The state of Illinois also provides a guide for foreign corporations here.
Like the California Foreign Qualification form, Illinois’ Foreign Qualification form also requires the appointment of a registered agent. Please refer to the discussion in the “California” section for details on appointing a registered agent. Again, since your corporation is located in Illinois, it can serve as its own agent if you so choose, with the foregoing caveats attached.
Fees: $175 minimum, made payable to the Secretary of State. The Secretary of State’s office will contact you if additional fees are due.
Where to submit:
Secretary of State, Department of Business Services, 501 S. Second St., Rm. 350, Springfield, IL 62756
In New York, you’ll have to fill out an Application for Authority.
With this form, you must also include a Certified Copy of your Delaware Certificate of Incorporation or Certificate of Good Standing (certified within the last 90 days). This can be requested from the Delaware Division of Corporations by submitting this form. This form must be submitted to the same fax number or address provided under the “Submitting Your Certification of Incorporation” section. More information about what it means to be “doing business” in New York can be found here.
Fees: $225, made payable to the New York Department of State.
Where to submit:
New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. However, if the foreign corporation has been conducting business in New York State prior to filing its Application for Authority, it must obtain the consent of the New York State Tax Commission by calling the N.Y. State Tax Commission at (518)485–2639.
We’ve also made it easier to take the first post-incorporation steps a high-growth startup needs to prepare for eventual outside investment. This includes:
- Action of Incorporator
- Action by Unanimous Consent of the Board of Directors
- Restricted Stock Purchase Agreement(s)
- 83(b) Elections
Follow the link below and we can produce these documents for you. Again, for $50, we’ll email all of your founders, directors, and necessary officers to collect electronic signatures needed to certify these documents. We’ll keep these documents safely stored in the cloud, available for your access whenever you need them.
Click here to use our post-incorporation documents
This is only the start of our journey. We’ll keep building out features so that we can help startups along every stage of their journey: fundraising, hiring, as well as educational resources about exits, business litigation, etc. We’ll conveniently save these documents on our dashboard, where they can be accessed by you at any time.