# Delaware C Corporation Formation

> A Delaware C corporation is the standard vehicle for startups raising US venture capital. Incorporation involves a certificate of incorporation with authorised shares, bylaws, board consents, founder stock purchases and, where shares vest, an 83(b) election within 30 days. The corporation pays 21% federal tax, files an annual report and franchise tax by 1 March, and — if founders are Indian residents — must be set up within India's overseas investment rules.

Practice: US Company Registration — https://www.industax.com/services/us-company-registration/

Indian founders often 'flip' an Indian company under a Delaware parent. That structure must follow FEMA's overseas investment rules, Indian tax on share swaps, and transfer pricing between the parent and Indian subsidiary — and can create Place of Effective Management risk if the parent is effectively run from India.

We incorporate, issue founder stock, file 83(b) elections, and plan the Indian side of the structure with your counsel.

## Key facts

| Item | Detail |
| --- | --- |
| Federal tax | 21% |
| Delaware filings | Annual report and franchise tax by 1 March |
| Franchise tax | Assumed par value method usually lowest for startups |
| 83(b) | Within 30 days of restricted stock grant |
| Indian founders | ODI rules; POEM and transfer pricing |

## Who needs this

- Startups raising US venture capital
- Founders joining US accelerators
- Indian companies flipping to a US parent

## What's included

- Incorporation and bylaws
- Founder stock and 83(b)
- EIN
- Indian ODI and tax planning

## Documents

- Founder passports and addresses
- Cap table plan
- Business description

## Process

1. **Incorporate** — Certificate and bylaws filed.
2. **Issue** — Founder stock and 83(b) elections.
3. **Structure** — Indian side aligned with FEMA and tax.

## FAQs

### Do non-US founders need to file an 83(b) election?

If founder shares are subject to vesting, an 83(b) election is often recommended even for non-US persons, to fix the taxable value at grant. It must reach the IRS within 30 days.

### Can an Indian resident own shares in a Delaware corporation?

Yes, under the overseas investment rules — directly as an individual within LRS limits or through an Indian company — with reporting through the AD bank.

### What is a 'flip'?

Restructuring so that a US company owns the Indian operating company, usually through a share swap. It has Indian tax and FEMA consequences that need planning before signing term sheets.

## Official sources

- Delaware Division of Corporations: https://corp.delaware.gov/
- RBI — Overseas Investment: https://www.rbi.org.in/

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Canonical page: https://www.industax.com/services/us-company-registration/delaware-c-corp-formation
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.