How to start a company in United States

Last checked: November 2026 · Currency: USD

In the US, companies are formed under state law, so you pick a state as well as a company type. Teams that plan to raise venture capital almost always form a Delaware C-Corp. Teams that want to stay small or bootstrap often form an LLC in their home state. Rules, fees and state taxes differ a lot from state to state, so check your own state's Secretary of State website.

General information, not legal or tax advice. Rules and fees change; always check the official source.

Recommended for co-foundersMost co-founder teams that plan to raise from investors form a Delaware C-Corp, because VCs know Delaware corporate law well and C-Corp stock suits preferred shares, option pools and Qualified Small Business Stock (QSBS) treatment. If you live and work in another state, you usually also register the Delaware company there as a 'foreign' corporation, which adds that state's fees and taxes.

Company types

Type	Minimum capital	Liability	Best for
C-Corp (Delaware) C Corporation incorporated in Delaware	No minimum capital	Limited	Teams planning to raise venture capital or grant stock options. Most US investors expect this form.
LLC (home state) Limited Liability Company	No minimum capital	Limited	Bootstrapped or small teams. Profits pass through to the owners' personal tax returns by default. Usually converted to a C-Corp before a VC round.
C-Corp (home state) C Corporation incorporated in your home state	No minimum capital	Limited	Teams that want a corporation but only operate locally. Some investors will still ask you to reincorporate in Delaware.

Registration, step by step

1
Agree on equity, roles and vestingWrite down who owns what and who does what, and put founder shares on a vesting schedule, typically 4 years with a 1-year cliff. Each founder who receives restricted stock should consider filing an 83(b) election with the IRS within 30 days of receiving it.IRS Form 15620 – Section 83(b) election
2
Choose Delaware C-Corp or a home-state LLCIf you plan to raise VC money, choose a Delaware C-Corp. If you plan to bootstrap, a home-state LLC is often simpler and cheaper. LLC fees, annual taxes and filing rules differ by state, so check your state's Secretary of State site.SBA – Choose a business structure
3
File formation documents and appoint a registered agentFor a corporation, file a Certificate of Incorporation with the Delaware Division of Corporations; for an LLC, file Articles of Organization (or a Certificate of Formation) with your state. Every state requires a registered agent with an address in that state.Delaware Division of Corporations
4
Adopt bylaws, issue founder stock and register in your home stateAdopt bylaws (corporation) or an operating agreement (LLC), issue founder shares under stock purchase agreements, and assign the founders' IP to the company. If the company works outside its state of formation, register it there as a foreign entity.SBA – Register your business
5
Get an EIN and open a business bank accountApply for a free Employer Identification Number (EIN) from the IRS. You need it to open a business bank account, hire staff and file taxes. There is no minimum capital, but keep company money separate from personal money.IRS – Get an EIN
6
Register for state taxes and keep up with annual filingsRegister with your state tax department for income, sales or payroll tax as needed. Delaware corporations file an annual report and pay franchise tax by March 1. Delaware LLCs pay an annual tax by June 1.Delaware – Annual report and taxes
7
Protect your name and technologySearch existing marks and file a federal trademark with the USPTO. If you have an invention, consider a low-cost provisional patent application before any public disclosure.USPTO – Trademarks

Costs and time

Item	Amount
Delaware Certificate of Incorporation (state filing fee, minimum)	about $89–109+, depending on authorized shares; expedited service extra Check the official source
Registered agent in Delaware (commercial provider)	about $50–300 per year Check the official source
Delaware annual report fee (corporation)	$50 per year
Delaware franchise tax (corporation)	minimum $175 (Authorized Shares method) or $400 (Assumed Par Value Capital method); can be far higher if you authorize many shares and use the default method
Delaware LLC annual tax	$400 per year
Home-state LLC or foreign-qualification filing	roughly $35–500 one-time, plus annual fees; varies by state (e.g., California charges an $800 minimum annual franchise tax) Check the official source
EIN	Free

How long it takes: Roughly 1–2 weeks. Delaware usually processes filings within a few business days, or within 24 hours or less if you pay for expedited service. You can get an EIN online on the same day. Bank account opening and foreign qualification in your home state can add a week or more.

Taxes

Tax	Rate	Note
Federal corporate income tax (C-Corp)	21% flat	Plus state corporate income tax, which varies by state (some states have none). Dividends are taxed again at shareholder level.
LLC (default tax treatment)	Pass-through: profits taxed on members' personal returns	Members generally also pay self-employment tax. An LLC can elect to be taxed as a corporation.
Delaware franchise tax	Minimum $175 / $400 depending on method; maximum $200,000 for most corporations	Due March 1 with the annual report. Your home state may also tax the company if you operate there.
Qualified Small Business Stock (Section 1202)	Up to 100% federal exclusion of gain on qualifying C-Corp stock	For stock issued after early July 2025: 50% after 3 years, 75% after 4, 100% after 5; cap $15M per issuer; company gross assets up to $75M. Some states (e.g., California) don't follow it. Get tax advice. Check the official source
Sales tax	Set by state and local governments (no federal VAT)	Registration rules depend on where you sell; some states have no sales tax.

Protect your name

TrademarkUSPTO (federal registration, all US states)$350 per class (base electronic application); extra surcharges if information is missing or you write your own description instead of using the ID Manual Trademark office Trademark basics →

PatentUSPTOPatent office Patent basics, and when not to bother →

Tips for co-founders

Founder vesting (typically 4 years with a 1-year cliff) is standard and investors expect it.
File the 83(b) election within 30 days of receiving restricted stock; the deadline cannot be extended and missing it can cause large tax bills later.
Have every founder sign an IP assignment (often called a CIIAA) so the company, not an individual, owns the code and brand.
When forming a Delaware C-Corp, authorize many shares at a very low par value, and file the franchise tax using the Assumed Par Value Capital method to avoid a surprisingly high default bill.
Domestic US companies currently don't have to file FinCEN beneficial ownership (BOI) reports, after a March 2025 interim rule; foreign companies registered in the US still may have to.
Converting an LLC to a C-Corp later is possible but costs legal fees and can have tax consequences, so pick C-Corp early if you know you'll raise VC.

The co-founder agreement checklist →

Official links

General information, not legal or tax advice. Rules and fees change; always check the official source. Last checked: November 2026.

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