October 14, 2026
If you plan to raise money from venture capitalists or angels, incorporate in Delaware. Investors, their lawyers and the standard financing documents all assume a Delaware corporation. If you are building a business you will own yourself and never sell to investors, incorporate in your home state and avoid maintaining registrations in two states.
Key takeaways
Our rule of thumb is simple: if you are raising outside capital, incorporate in Delaware. If not, incorporate in your home state.
That rule covers angel money too. Angels use the same SAFEs and financing forms as venture funds, and those forms are written for Delaware corporations. If you might take outside money in the next year or two, start in Delaware rather than converting later.
Delaware is preferred for its corporate law, not its taxes. It has a specialized business court, a deep body of case law that makes outcomes predictable, a flexible statute and strong protections for directors. For the full explanation, see Why Do Venture Capitalists Prefer Delaware C Corps?
Because Delaware adds cost without adding much value if no investor will ever ask for it. Incorporation creates the legal entity, but it doesn’t decide where the business is taxed. A company incorporated in Delaware that operates in California is still subject to California tax.
It also adds paperwork. Say Gregarious Games Inc. is based in New York but incorporates in Delaware. After forming in Delaware, it must register (or “qualify”) to do business as a foreign corporation in New York. Every year after that, it files reports and pays fees in both states. If Gregarious Games will never raise outside money, it’s better off incorporating in New York. See Do I Really Need to Qualify My Delaware Startup in My Home State?
One New York-specific point: a New York LLC must publish notice of its formation in two newspapers within 120 days, which can cost from a few hundred dollars to well over $1,000 depending on the county. New York corporations don’t have this requirement.
No. A few large public companies have moved from Delaware to Texas or Nevada in the past two years, and Delaware amended its corporate law in 2025 partly in response. What those states mainly offer is more deference to directors and controlling stockholders, and narrower rights for stockholders to inspect the company’s books or bring suits. That appeals to a public company with a controlling founder worried about stockholder litigation. It does little for a startup, and none of it changes the answer. Venture investors, their counsel and the standard documents still assume Delaware, and a Texas or Nevada company will usually be asked to convert to Delaware before a priced round, at the founders’ expense.
For a typical startup, the recurring Delaware costs are modest:
Missing the March 1 deadline triggers a $200 penalty plus 1.5% monthly interest. On top of the Delaware costs, you’ll pay your home state’s registration fee and annual report fees, which vary by state. Initial state filing fees to incorporate in Delaware are usually under $200. For legal fees, see our pricing.
Yes. Every state requires a corporation to have a registered agent with a physical address in that state to receive lawsuits and official notices. Most startups use a commercial registered agent service. See Registered Agent.
Partly. Delaware doesn’t publish a company’s stockholders. Directors’ names and one officer’s name do appear on the annual franchise tax report, which is a public record even though it isn’t searchable online.
Yes, in Delaware. A PBC’s name doesn’t have to include “PBC” or “public benefit corporation,” as long as the certificate of incorporation states that it is a public benefit corporation and stockholders receive notice of that status when they acquire shares.
Yes. A company can convert or reincorporate into another state, most often from a home-state corporation or LLC into a Delaware corporation before a financing. It requires board and stockholder approval, filings in both states and a review of tax consequences with your tax advisor. It’s cheaper and simpler to start in the right state.
Before you raise money, hire, sign significant contracts or start building IP with co-founders. See When Should I Incorporate My Startup? and What Legal Structure Is Best for Your Startup? See Founder Guide: Incorporating Your Startup.
If you’d like help incorporating in Delaware, see our Corporation Startup Package or contact us.
