Incorporate your startup

Why this step matters

A company separates your personal finances from the business, gives the business its own contracts, bank account and intellectual property, and lets you issue shares to co-founders, employees and investors. Many startup programs, cloud credit offers and banks require a registered company before you can apply.

Where and how you incorporate matters more than founders expect. Fixing the wrong structure later usually means lawyers, tax bills and delays during a fundraise.

How to do it

1. Decide whether you plan to raise venture capital. In the US, VC-backed startups are usually Delaware C corporations, because investors and accelerators know Delaware corporate law and the C corp can issue preferred stock and stock options. If you plan to stay small and self-funded, an LLC in your home state is often simpler and can be taxed as a pass-through. Get tax advice before forming an LLC you might later convert.
2. Choose your country and entity type outside the US. In the UK the standard choice is a private company limited by shares (Ltd), registered with Companies House. In India founders typically form a private limited company through the Ministry of Corporate Affairs SPICe+ process. In the EU each country has its own limited-company form (GmbH, SAS, BV and others) with different capital and notary rules. Non-US founders targeting US investors often form a Delaware C corp, sometimes as a parent of a local company; take local tax advice before doing this.
3. Pick a formation route. You can file directly with the state or registry, use a law firm, or use an online formation service that also issues founder stock, provides a registered agent and gets your tax ID. Compare them at /best/incorporation.
4. Get a tax ID. In the US apply for an Employer Identification Number (EIN) on the IRS website; the IRS does not charge for it. In the UK, Companies House informs HMRC and the company receives its Unique Taxpayer Reference by post.
5. Issue founder shares and sign the paperwork. Adopt bylaws or articles, appoint directors, issue founder shares (usually with vesting, see the next step) and have each founder assign any existing code, designs and domain names to the company. In the US, founders receiving restricted stock usually file an 83(b) election within 30 days of the grant.
6. Set up compliance reminders. In Delaware, corporations file an annual report and pay franchise tax by 1 March each year, and LLCs pay an annual tax by 1 June. In the UK, companies file a confirmation statement every year and annual accounts with Companies House, plus a Corporation Tax return with HMRC.
7. Register where you actually operate. A Delaware company with staff or an office in another US state usually needs to register there as a foreign corporation and pay that state's fees and taxes.

What it costs and how long it takes

Costs depend on the route. As of October 2026, Delaware charges a minimum annual franchise tax of $175 under the Authorized Shares method or $400 under the Assumed Par Value Capital method, plus a $50 annual report fee for non-exempt domestic corporations; late filing costs a $200 penalty plus interest. Delaware LLCs pay a flat annual tax, which House Bill 400 raised from $300 to $400 starting with the 2026 tax year; because Delaware bills in arrears, the payment due 1 June 2026 still covers 2025 at $300, and the $400 rate first shows up on the payment due 1 June 2027. Many founders receive alarming franchise tax notices calculated with the Authorized Shares method; recalculating with the Assumed Par Value Capital method often gives a much lower figure, so check before you pay. Registered agent fees and formation-service fees vary by provider.

In the UK, Companies House lists an online incorporation fee of £100 and an online confirmation statement fee of £50 (about $135 and $65). Online UK registrations are often completed within a day; US state filings take from a day to a couple of weeks depending on the state and any expedite fee.

Free credits, perks and services that help

Some incorporation services bundle startup perks, bank account introductions or credits with their packages; compare them at /best/incorporation and check /perks. Accelerators sometimes require, or help with, a Delaware C corp; see /accelerators. For ongoing filings and tax returns, look at /best/accounting-tax and /best/legal.

Common mistakes

• Incorporating too late. Code written and deals signed before the company exists may belong to individuals. Incorporate before you raise, hire or sign customers, and assign prior work to the company.
• Picking an entity for the wrong reason. An LLC can be right for a bootstrapped business and awkward for a VC-backed one. Decide based on your funding path.
• Missing annual filings. Late Delaware or Companies House filings mean penalties, and in the UK a company can eventually be struck off.
• Skipping the 83(b) election. In the US, missing the 30-day window cannot normally be fixed and can create a large tax bill as shares vest.
• Using a personal address carelessly. In the UK the registered office address is public. Use a service address if you do not want your home address on the register.

Go deeper

For the founder paperwork that comes straight after incorporation, see the next step, Split equity and sign a founder agreement, and compare formation services at /best/incorporation.