When incorporating a business in Delaware, a Certificate of Incorporation or a Certificate of Formation (for LLCs) is a crucial document that lays out the foundation for the company. However, as your business grows and changes over time, you may find the need to modify your Certificate of Incorporation.
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Fortunately, Delaware provides a streamlined process to amend the Certificate of Incorporation. In this article, we will guide you through the steps to amend your Delaware Certificate of Incorporation.
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Before we delve into how to amend the Certificate of Incorporation, it is essential to understand why it may be necessary. Here are some reasons why a business may want to amend its Certificate of Incorporation:
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1. Change in Name: If the company chooses to operate under a new name, an amendment is required to update the Certificate of Incorporation to reflect the new name.
2. Change in Address: When the company’s physical address or mailing address changes, an amendment must be submitted.
3. Changes in Officers, Directors or Shareholders: If there is a change in the company's leadership or the number of shares issued to the shareholders, an amendment may be required.
4. Changes in Business Operations: If there is a significant change in the company's business operations, such as adding a new line of products or shifting to a different industry, updating the Certificate of Incorporation may be necessary.
5. Change in Authorized Shares: Corporations may require changes to authorized shares as they increase capital investments or offer additional shares.
6. Desired Modifications: Corporations that want to include or restrict certain language or clauses may file an amendment following its procedures.
The first step to amending your Corporation's Certificate of Incorporation is to assemble the Board of Directors, and Shareholders who approve company's decisions.
The first step is to draft a written amendment including the outdated language in the prior certificate of incorporation. The amendment should also detail all specific changes that the business requires. After drafting, the amendment should be thoroughly checked for errors and should then be shared with all parties in the Board of Directors and Shareholders.
Once the amendment passes, a Certificate of Amendment should be submitted to the Delaware Department of State, Division of Corporations for approval. The document can be completed and submitted online at the Department's website at https://corp.delaware.gov. Those prefer applying through traditional mail must include an appropriate application fee for completion.
Once the Certificate of Amendment is officially approved, next step is to update other interfaces properly like the federal and local government. Specifically, it requires updating federal and state Tax ID information, licenses, PO boxes, credit contact information, legal agreements with procedures instructions, and more.
While amending a Certificate of Incorporation may sound complicated, Delaware's procedure is relatively simple, realistic and often easier than states apart from Delaware. In brief, initiate the assembly of the board of directors and either amend current document or draft new documentation specifically containing all essential restraints or modifications, submit it to the State Department for endorsement, and communicate with essential stakeholders.