Starting a corporation in Delaware is an exciting journey. But as your company grows, you may find it necessary to make changes to its structure and governance. Making any changes to your established corporation in Delaware requires filing the Amendment of Certificate of Incorporation. An amendment is a process through which you report the structural or any change in your corporation to the Delaware Secretary of State. To do so, you require to follow a few simple steps. You need to get the amendment form, enter the details of changes, and submit it to the appropriate address with the filing fee will make things done.
In this article, we have shared the process in detail. You will learn how to amend Delaware Certificate of Incorporation in easy steps. It will be helpful for you if you read the article till the end.
On this page, you’ll learn about the following:
What is Delaware Certificate of Incorporation?
The Delaware Certificate of Incorporation is a legal document that you need to file with the Secretary of State while registering your corporation in Delaware. It is similar to the Certificate of Formation you file while creating an LLC in Delaware. If you already own a corporation in Delaware, you must know what the Certificate of Incorporation is. However, those who are not aware of this document can get all the required details from this page. The Certificate of Incorporation is a set of papers that have all the information regarding your corporation and are filed with the Secretary of State. You must pay the filing fees to register your Certificate of Incorporation.
This document has information related to your corporation. Details like the name of the corp, principal address, Delaware Registered Agent details, corporation structure, directors, shareholders, and signature of the incorporators should be mentioned in the document. An online or offline form mentioning these details should be filed with the SOS at the time of forming your corporation. You must pay the filing fee to the state online or by check.
Like forming an LLC, for the corporation, it takes some time to form your business in Delaware after filing the documents. You can expedite the filing process by paying additional money over the filing fees.
It is good to make changes in your Certificate of Incorporation. When you change anything, specifcally the name, it brings good and bad effects to the company. Make sure the name change does not affect your revenue or status adversely.
– LLCBuddy Editorial Team
Why Amend Certificate of Incorporation in Delaware?
There can be several reasons why you make changes to your corporation. A business runs based on diverse components. From economic conditions to internal structures (shareholders and directors), the corporation can change many times in its life based on external or internal reasons.
Change of Delaware Corporation Name: The name of the corporation does not often change because it is the primary identity of any business. Sometimes, a spelling or the entire name requires to be changed for many reasons. In that case, the corporation has to file the amendment with the SOS mentioning the old and new names. They have to submit the business name change form with the amendment form.
Change of Statement of Purpose: This is a document where you explain the purpose of your corporation. The purpose says that you are involved in legal and lawful activities through your business. If you are having a nonprofit, you must have a community purpose. If you change that purpose, you must file the amendment. If you change the nature of the business or the purpose of the corporation overall, then you must file an amendment.
Change in Numbers of Stocks and Shares: Finally, if you change the number of shares or stock issues in your company, then you must amend it. It can be reduced or increased if you decide to remove or add a shareholder/partner to the corporation. In that case, it must be amended with the SOS.
How to Amend the Delaware Certificate of Incorporation
There are three main steps to file your amendment to the Delaware Certificate of Incorporation. Before you proceed with the steps of filing the form, you must know what changes you can make in your corporation and what changes you cannot. Let’s start with the first step and some related information,
Step 1: Determine What Changes You Need in Delaware Corporation
Updating your Certificate of Incorporation periodically can be beneficial by making necessary changes. However, frequent alterations in structure or name may not be advisable. The first step involves determining which changes are needed and assessing their potential impact. Modifying aspects of your existing business can affect your revenue or client relationships, so it’s crucial to carefully consider whether the changes are truly necessary and what consequences they may bring.
An up-to-date Certificate of Incorporation reflects the current status of a corporation in Delaware. The key elements of your updated Certificate of Incorporation may include the advantages of being a Registered Agent, the company’s contact information, and the process for receiving legal notices, among other details.
Step 2: Review the Changes You Made in the Certificate of Incorporation
The subsequent step involves reviewing the changes. The Delaware Secretary of State may request additional supporting documents based on the modifications made to your corporation. After finalizing the changes, you can proceed to draft the Delaware corporate amendment. Consult with the SOS to determine if any other documents need to be submitted. For instance, if you are changing the business name, you might be required to submit a name change/reservation form along with the Delaware Corporate Amendment form.
What Can Be Changed in Certificate of Incorporation
It is not easy to change things in your business. Besides, there are some restrictions in changing things in your corporation in Delaware. There are things you can change, but there are things that you cannot change. I have mentioned a few points in this article that you can change above, such as the name, statement of purpose, and the number of shares issued. Now, there are things that you cannot change in the Certificate of Incorporation.
What Can not Be Changed in Delaware Corporate Amendment?
If you started a corporation in Delaware, you must initially have appointed a Registered Agent. You cannot change the initial registered agent in the Certificate of Incorporation Corporate Amendment. You can change it using other methods and forms available in the Delaware SOS.
Another point is the initial mailing address of your corporation cannot be changed in the Delaware Corporate Amendment. In this case, you can change it through other methods requiring different forms.
The third point is the initial directors who formed the corporation in Delaware. The details of the initial directors cannot be changed in the Delaware Corporate Amendment. There is no other way to change the directors’ details.
Step 3: File the Delaware Corporate Amendment
Finally, file the Delaware Corporate Amendment with the Secretary of State by the methods (online or offline) available. You must go through the filing process mentioned on the SOS official website before you start the filing process. You must pay the state fees for filing the Delaware Corporate Amendment.
Penalties for Not Filing the Amendment in Delaware
Now, one question arises when we talk about filing the amendment what happens if you don’t amend the Delaware Certificate of Incorporation? The answer is simple. You might have to pay heavy penalties if you do not file it. Besides, you may lose existing clients as they may not be interested in continuing to work with your company.
They might cancel the existing contract; you might lose the bank loan or advance opportunities, or you may lose the business bank accounts for not complying with the amendment filing requirements. Hence, it is highly recommended to amend the Delaware Certificate of Incorporation.
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Why Delaware Corp Amendment is So Important
Delaware is known as the corporate capital of the world, with a large number of Fortune 500 companies choosing to incorporate there due to its favorable business laws and tax-friendly regulations. As such, any amendments made to the Delaware Corporation Law have a far-reaching impact on businesses both within the state and beyond.
The Delaware Corp Amendment allows corporations to make changes to their existing bylaws, including modifications to their capital structure, corporate governance policies, and operational procedures. By granting corporations the flexibility to amend their governing documents as needed, the Delaware Corp Amendment enables companies to adapt to changing market conditions, business needs, and regulatory requirements.
One of the key reasons why the Delaware Corp Amendment is so important is its role in ensuring corporate compliance. By keeping their bylaws up-to-date and in alignment with the latest regulations, companies can avoid legal disputes, fines, and other consequences that may arise from operating in violation of the law. Compliance with the Delaware Corporation Law not only protects businesses from legal liabilities but also safeguards their reputation and credibility in the eyes of investors, customers, and other stakeholders.
Moreover, the Delaware Corp Amendment promotes transparency and accountability in corporate decision-making. By allowing corporations to amend their bylaws in a transparent and legally compliant manner, the amendment ensures that all stakeholders are aware of any changes made to the company’s governance structure. This level of transparency fosters trust and confidence among shareholders, as they can rest assured that the corporation is operating in a fair and ethical manner.
In addition, the Delaware Corp Amendment plays a crucial role in promoting corporate innovation and growth. By giving corporations the flexibility to adapt their bylaws to suit their evolving business needs, the amendment encourages companies to take strategic risks, explore new opportunities, and drive sustainable growth. This flexibility is particularly crucial for startups and emerging companies that need the freedom to experiment, pivot, and grow in today’s fast-paced and dynamic business environment.
Overall, the Delaware Corp Amendment is a vital regulation that serves as a cornerstone of corporate governance in the state of Delaware. By allowing corporations to amend their bylaws in a legally compliant and transparent manner, the amendment enables businesses to stay ahead of the curve, comply with regulations, build trust with stakeholders, and drive innovation and growth. In today’s competitive and rapidly changing business landscape, the Delaware Corp Amendment is more important than ever in helping companies navigate the complex maze of corporate governance and thrive in the global marketplace.
Conclusion
Amending the Delaware Certificate of Incorporation may not involve numerous steps, but the process can be more complex than it appears. It’s crucial to carefully consider any changes to ensure they do not negatively impact your business or client relationships. Before proceeding with modifications and amendments, it is advisable to consult with an attorney or legal professional for guidance.