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Minimum Capital Requirements to Form a Delaware Company

Minimum Capital Requirements to Form a Delaware Company

02.02.2021 13:06 by Clemta

There isn’t minimum capital requirement in order to start your company in Delaware. However there are different share types for LLCs and Corporations. Common stock is standard share of Corporations. LLCs do not have stock but members contribute capital to the LLC when it is formed.

Every state has slightly different requirements to form a company. The state of Delaware is considered one of the best options to form a Corporation or LLC because of its many advantages. One of them is; in the state of Delaware, you do not have to have minimum capital in order to start your company. So you can start your LLC or Corporation with zero initial investment required. Keeping this in mind, you should also be careful about inadequate capitalization while determining your capital.

 

If you are planning to form a Corporation, you must only assign the amount of common stock and Common stock is a type of shares stock issued to the majority of shareholders in a company and is the standard ownership share of a Corporation. You can also assign a par value for each stock, “par value” is the minimum value that the stock will have. Multiplying par value by the number of shares gives you the value of capital.  Also, you can issue no-par value shares.

 

There is a different mechanism with LLCs, unlike a corporation, LLCs do not have stock. Instead, members contribute capital to the LLC when it is formed. They can also contribute capital If it is needed later on. These initial commitments are usually expressed in the Operating Agreement of LLC.