Forming a company takes an afternoon. Keeping it in order takes a little attention every month for as long as it exists. Almost none of the work is hard, but much of it is easy to forget, and forgetting compounds. A missed franchise tax payment turns into penalties and eventually a void charter. An option grant nobody approved turns into a 409A problem. A share transfer nobody recorded turns into a cap table nobody trusts.
This handbook covers what a Delaware C corporation owes after formation, roughly in the order a startup runs into it: the first ninety days, the yearly calendar, the Delaware franchise tax, which decisions need whose approval, the cap table, changes to the founding team, charter amendments, registering in other states, and finally the company's records and, if it comes to that, shutting down.
It assumes you have read, or at least skimmed, Legal Concepts for Founders. Corply tracks most of these obligations for its customers and prepares and files many of them, but this handbook explains the rules themselves, whoever ends up handling them.
Contents
- The first 90 days
What to finish right after formation so the company can take money, pay people and pass diligence.
- The annual calendar
Every recurring federal, Delaware and state deadline for a calendar-year startup, in one place.
- Delaware franchise tax
Two ways to calculate the tax, why your notice may say $85,165, and how to pay $400 instead.
- Board and stockholder decisions
Which decisions need the board, which need stockholders too, and how to record them so diligence goes smoothly.
- Keeping the cap table
The stock ledger is the legal record of who owns the company, and it has to be right every time anything changes.
- When the team changes
Adding a cofounder, a cofounder leaving, and changing directors and officers.
- Amending the charter
Authorizing more shares, changing the name, splitting stock and adding preferred stock.
- Registering in other states
When a Delaware company must register where it operates, what payroll registration involves and how sales tax nexus works.
- Records, good standing and shutting down
What to keep forever, how to stay in good standing and how to close a company properly.