Follow this handy guide to set up a Delaware LLC.
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by Rudri Bhatt Patel
Rudri Bhatt Patel is a former attorney turned writer and editor. Prior to attending law school, she graduat...
Updated on: August 4, 2024 · 5 min read
A limited liability company (LLC) offers liability protection and tax advantages, among other benefits for small businesses.
LLC formation in Delaware is easy. Just follow these seven steps, and you'll be on your way.
You'll need to choose a name to include in your articles before you can register your LLC.
Names must comply with Delaware's naming requirements. The following are the most important requirements to keep in mind:
See a complete listing of Delaware's naming rules.
Delaware requires you to appoint a registered agent for your LLC.
A registered agent is the person or entity authorized to receive service of process and other official legal documents and notices on behalf of your LLC.
A registered agent can be a person (including yourself or an employee of your LLC) or an entity that offers a registered agent service. They must meet the following criteria:
The Certificate of Formation (commonly called Articles of Organization in other states) is a document that officially establishes your LLC by laying out basic information about it.
Prepare a Certificate of Formation and file them with the Delaware Division of Corporations to register your Delaware LLC properly. Though it sounds like a big job, that simply means filling out a relatively simple online form and submitting it. You can also send it by mail.
To prepare your articles, you'll usually need the following information:
Once you file your Certificate of Formation, the Delaware Division of Corporations will review the filing. If the certificate is approved, the LLC becomes a legal business entity.
The state will issue you a certificate that confirms the LLC formally exists after the LLC's formation documents are filed and approved.
This certificate will allow the LLC to obtain an Employer Identification Number (EIN), business licenses, and business bank account.
An operating agreement is a document that outlines the way your LLC will conduct business.
Delaware does not require an operating agreement, but it is an essential component of your business. Having a readily accessible, written operating agreement is helpful for various reasons, including settling disputes that may arise over financial agreements and other potential litigation. Without an agreement in place, the courts make determinations based on state law, not necessarily what is in the best interest of the LLC and its members.
The operating agreement can include, but is not limited to, the following:
The nine-digit Employer Identification Number (EIN) is assigned by the Internal Revenue Service to identify your LLC for taxes. You can obtain your EIN by mail or online through the IRS.
The purpose of an EIN is to assist with the following:
Delaware LLCs must pay an alternative entity tax (sometimes called annual tax) annually. The tax is $300 and usually due on June 1 every year.
Registering your LLC gives you a legal foundation to conduct business. Plan to keep your LLC compliant and in active status on the state's website.
Delaware LLCs are not required to file an annual report. You may need to pay a gross receipts tax if you sell goods and have employees, quarterly tax payments and may also need to maintain a registered agent for your business.
A registered LLC also makes it possible for you to do the following:
Every state has different rules, costs, and considerations for LLC formation.
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