Month Zero: Incorporation Is a Commit

Incorporation still looks deceptively simple. You file a document with a state, the state stamps it, and a legal person comes into existence. Founders often treat the rest as paperwork. It is not.

The first decision: what are you?

Before you write code or sign customers, you need to decide what kind of entity you are creating. This is a structural decision, and it is harder to unwind later than most product choices.

Delaware C-Corporation. If you plan to raise venture capital, issue stock options, or eventually go public, this is the default. Delaware’s corporate law is heavily litigated, predictable, and familiar to investors and startup counsel.

The cost: $89 filing fee, franchise taxes starting at $175 per year (often much more as you authorize more shares), and the requirement to qualify as a foreign corporation in whatever state you actually operate in.

Wyoming LLC. If you’re bootstrapping, building a lifestyle business, or want maximum flexibility in how profits are distributed and taxes are handled, the LLC is compelling. Wyoming charges $100 to file, $60 per year for the annual report, levies no state income tax and no franchise tax, and doesn’t publicly disclose member names.

The tradeoff: LLCs can’t issue stock options (the standard tool for compensating employees), and most venture investors won’t invest in one. Converting an LLC to a C-Corp later is possible but expensive and creates tax events you’d rather avoid.

This is a decision with a blast radius measured in years. Choose based on where you’re going, not where you are.

The formation state machine

Incorporation is not a single event. It is a sequence with dependencies.

For a Delaware C-Corporation, the sequence is sixteen steps:

You appoint a registered agent. You obtain their consent evidence. You file the Certificate of Incorporation. The incorporator executes the incorporator action — appointing the initial board and adopting the bylaws — then resigns. The board holds its organizational meeting (usually by written consent) and passes the initial resolutions: ratifying the certificate, electing officers, approving founder stock, authorizing bank accounts, applying for an EIN.

Then the post-formation obligations begin: issuing founder stock and filing 83(b) elections within 30 days. Filing Form D with the SEC within 15 days of the first securities sale. Registering as a foreign corporation in your operating state. Setting up books and records. Configuring compliance monitoring for the March 1 franchise tax deadline.

Miss a step and the next one fails. Miss a deadline and you create penalties or diligence problems.

A Wyoming LLC has fourteen steps. Fewer, but no less sequential. The operating agreement replaces the bylaws. Membership interests replace stock. The principal replaces the board. The transitions are different; the discipline is the same.

What goes into the Certificate

The Certificate of Incorporation sets the basic structure of the corporation. If you get it wrong, fixing it later requires board approval, shareholder approval, and another filing with the state.

The standard founder-friendly certificate includes:

Authorized shares. Typically 10,000,000 shares of Common Stock and some amount of blank-check Preferred Stock. The par value is often set at $0.0001 per share because low par value helps keep Delaware franchise tax low under common startup configurations.

Blank-check preferred. The board is authorized to issue preferred stock in one or more series, with rights, preferences, and restrictions determined at the time of issuance. This lets you raise a Series A without amending the charter.

Exculpation. Under DGCL Section 102(b)(7), the certificate can eliminate personal liability for directors for monetary damages for breach of fiduciary duty (with exceptions for loyalty, bad faith, and intentional misconduct). Every startup certificate includes this.

Purpose. “Any lawful act or activity.” Don’t get cute. Don’t limit yourself. Henry Ford wrote “to manufacture and sell automobiles” and then had to deal with shareholders who argued he couldn’t reinvest profits in anything else. Learn from history.

The organizational resolutions

The initial board written consent is often the densest single document in the corporation’s first year. In one session, usually by written consent, the board passes a large set of foundational resolutions:

Ratify the certificate and bylaws. Elect officers (who must be natural persons — an AI agent cannot be an officer under Delaware law). Authorize founder stock issuance. Approve stock purchase agreements. Authorize opening bank accounts with the CEO as primary signatory. Direct the application for an EIN. Set the fiscal year. Adopt an equity incentive plan. Set spending limits. Designate compliance monitoring responsibilities.

If you’re using an agent-operated governance framework, the board also designates the agent operator, adopts the delegation schedule that defines the agent’s authority tiers, configures the agent’s credentials, and sets the requirement for annual re-authorization within 12 months.

Every one of these resolutions is a Tier 3 action — non-delegable, requiring board authority. The agent can prepare the documents, but a human signs them.

The registered agent question

Every corporation and LLC must have a registered agent in its state of formation — a person or entity available during business hours to accept service of process and official government correspondence. This is not optional. If your registered agent lapses, the state can administratively dissolve your entity.

The registered agent’s consent must be evidenced before filing. This means you need a signed document from the agent confirming they agree to serve. TheCorporation’s formation workflow requires this evidence as a submission blocker — the filing literally cannot be submitted without it.

Annual renewal of the registered agent appointment is a Tier 1 action — routine, mechanical, and exactly the kind of thing an autonomous agent should handle. But the initial appointment, because it involves selecting the agent, is part of the formation sequence and requires human decision-making.

The $89 that changes everything

The filing fee for a Delaware Certificate of Incorporation is $89. The filing fee for Wyoming Articles of Organization is $100. For less than the cost of a dinner, a new legal person comes into existence with the right to sign contracts, hold property, open bank accounts, issue equity, and persist indefinitely.

The cheapness of the filing obscures the significance of the act. Incorporation isn’t paperwork. It’s the creation of a separate legal identity that will accumulate obligations, assets, liabilities, and history for as long as it exists. The formation documents you file today will be read by investors, acquirers, regulators, and courts for the life of the entity.

Treat the commit accordingly.

The formation filing is the initial commit of your corporate repository. Every equity grant, board resolution, compliance filing, and tax election builds on top of it.

Make it clean.