We understand that starting a business is a big commitment with tons of complexity to navigate. To help you on your way, you can check out our free library of guides about running an internet business, which covers a wide variety of topics, including: choosing a company type, issuing equity, taxes, bookkeeping and accounting, growth and marketing, and business strategy.
Company entity options
Stripe Atlas supports two options for forming a U.S. company in Delaware:
- C Corporation
- Limited Liability Company (LLC)
When to form your company
C Corporations active in Delaware any time before December 31st owe at least the minimum Delaware Franchise Tax for that year. LLCs active before December 31st owe the full annual LLC tax for that year.
Neither the Franchise Tax nor the LLC tax is prorated. Your company might also owe U.S. Corporate Income Tax for the outgoing year. It might also owe taxes to a U.S. state other than Delaware, depending on where the LLC operates.
For all these reasons, companies planning to form near the end of a year might want to consider instead forming in January of the following year.