How to Start an LLC in Delaware
Here are the 7 steps to start a limited liability company (LLC) in Delaware
For more information on how to form an LLC in any state, see the article How to Form an LLC.
Find out how to form a Delaware LLC for yourself
Learn about Delaware LLC formation, including information on Registered Agents, naming rules, business licenses, and more.
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Creating an LLC in Delaware
A limited liability company (LLC) offers many benefits to small businesses, including liability protection and tax advantages.
A Limited Liability Company LLC must be formed in Delaware by filing a Certificate of Formation with the Delaware Department of State and paying the $90 filing fee.
However, you’ll first need to choose a name and registered agent for your Delaware LLC. The formation of an LLC may take up to 9-11 weeks if you file online (or 10-12 weeks if you file by mail). unless you pay an additional $50 for expedited processing (24 hours).
An LLC can be easily formed in Delaware. Our step-by-step guide on How to Start an LLC in Delaware will help you get started today. Find out more about LLCs and their benefits in our What is an LLC guide.
Step 1. Choose a Name for Your LLC Delaware
The first step to creating an LLC in Delaware is to choose a business name. Be sure that your business name complies with the Delaware naming requirements and can be searched by potential customers.
Follow these naming guidelines for Delaware LLCs:
- Your company name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.)
- It is not acceptable for your Delaware LLC to have words associated with a government agency (FBI, Treasury, State Department, etc.).
- A name must make sense and stand out from any other Delaware limited liability company, limited liability partnership, limited partnership, or corporation.
- There may be additional documentation and licensure paperwork required for certain restricted words (bank, lawyer, attorney, credit union, etc.).
- Check the state’s business name database to ensure the name you want is not already taken(including businesses no longer in operation)
See a complete list of Delaware‘ naming rules here.
Check URL availability: Check online to see if your business name is available as a domain. However, even if you don’t plan to make a business website today, you may still want to buy the URL so that it doesn’t get seized by others.
Yes, you can add a DBA to an LLC, if your LLC is doing business under a different trade name, most states require you to register a DBA. To learn more about DBAs, read our What is a DBA Guide.
A $75 fee can be paid to reserve an available name for 120 days. Reservations can be made online through the Delaware Division of Corporations‘ website, or you can print and mail the Application for Reservation of Limited Liability Company Name.
An LLC stands for a Limited Liability Company. A simple business structure that is more flexible and offers many of the same benefits as a traditional corporation. An LLC is one of several business entities, such as a sole proprietorship, partnership, and corporation (C-Corp and S-Corp). For more information, see “What is a Limited Liability Company?”.
Step 2: Appoint Your Registered Agent in Delaware
Your next step in forming an LLC in Delaware is to choose a Registered Agent, an individual or company authorized to recieve important legal documents, tax forms, notice of lawsuits, and official government correspondence on behalf of your business.
All Delaware LLCs must have a registered agent. Please include your registered agent’s name and address on your Articles of Organization .
Registered Agent Requirements in Delaware
To comply with Delaware law, your LLC’s registered agent must be a resident or business entity such as registered agent service authorize to run business in Delaware. The “registered address” cannot be a P.O. box. It must be a real physical address that can be visited in person.
Learn more about Delaware Registered Agents by reading our what is a registered agent guide.
A registered agent must either be a Delaware resident or a Delaware-authorized corporation, such as a registered agent service. You have the option of electing someone from your company, including yourself.
You can change your Delaware Registered Agent if you own a Delaware corporation or LLC and are unhappy with the service provided by your current Registered Agent. To change your Registered Agent, you must first fill out and submit a change of Registered Agent form.
You can manage government filings for your LLC by using a registered agent service. Most businesses benefit from hiring a professional service for more than the costs.
Are You looking for a Registered Agent?
Wise Business Plans offers a free year of registered agent service when forming an LLC in Delaware.
Step 3. File Articles of organization for a Delaware LLC
To create your Delaware LLC, you will need to file a Certificate of Formation of Limited Liability Company with the Delaware Division of Corporations. The filing fee is $90. You may apply online, by mail, or in person.
We can also assist you with our business formation services, but we’ll go through the steps with you here.
The articles must contain:
- The LLC’s name, and the signature of an organizer, member, manager, or an attorney-in-fact.
The following information must be included:
- The email address of the LLC,
- LLC name, and name reservation number (if any)
- Name and address of the person filing the articles of incorporation
- LLC’s principal mailing address
- Name and address of LLC’s registered agent, and
- All organizers’ names and addresses are required
If you’re bringing your existing LLC into the State of Delaware, you’ll need to set up a Foreign LLC.
Two Ways to File the Article of Organization
The 1st option is:
Online filing through the State of Delaware Department
The 2nd option is:
Filing the Article of Organization by Mail
Address to Mail
There is a state filing fee of $90 payable to the Delaware Department of State (Nonrefundable)
Note: A cover sheet is required for mail-in filings.
Delaware Division of Corporations
401 Federal St.
Suite 4
Dover, DE 19901
In a member-managed LLC, the members (owners) take on the business’s daily responsibilities. Manager-managed LLCs are managed by managers who are elected by the members. Those who manage your LLC will have the authority to do a wide range of tasks-from hiring staff to opening bank accounts.
An LLC is known as a “domestic LLC” when it operates in the state where it was created. Typically, when we talk about an LLC, we are actually referring to a domestic LLC. When an existing LLC wishes to expand its operations to another state, a foreign LLC must be formed.
Step 4. Get a Certificate From the State
When the state secretary of state receives your organization papers, your firm becomes operational. The secretary of state will process and send you a certificate of organization within five to seven business days.
This document allows the LLC to acquire an Employer Identification Number (EIN), business licenses, and business bank account.
Step 5. Write a Delaware LLC Operating Agreement
An operating agreement is a legally-binding document that sets out how your LLC will operate, from the voting process to mergers.
Operating agreements are not required in Delaware, but they are an essential part of your business.
Written operating agreements are helpful for different reasons, including resolving disputes over financial agreements and other potential litigation.
The LLC declaration can prove that your LLC is a separate entity, which can help preserve your limited liability.
An operating agreement ensures that all business owners are on the same page and reduces the possibility of future conflict. Having an LLC operating agreement will:
- Make things simpler: If you and your partners have disagreements about business, it is important to have everything in writing. This will help to resolve any disputes and also help make sure that everyone remembers the same agreement.
- Ensure that your business agreements are properly recorded: with the state. Your company is distinctive, but without an LLC operating agreement, it will be governed by Delaware state law, which is intended to handle every LLC that may be formed in the state. This might not be the best option for your business.
How should an operating agreement be drafted?
The operating agreement should detail the LLC’s overall business purpose and other important matters, such as how the company will be taxed and how new members will be accepted. Legal agreements can clarify several important concerns, such as:
- Who makes decisions for the company, especially those who decide if partners disagree.
- Who is responsible for different aspects of the business as well as for strategic decisions.
- If a partner leaves the company, what will happen to their ownership interests in the corporation.
- The members and their contributions
- How profits and losses will be divided
- Procedures for admitting new members and removing outgoing members
In Delaware, you can include just about anything in your operating agreement, as long as it doesn’t violate the state law or the Articles of Organization .
An operating agreement is not required in Delaware. Even if your LLC has only one member, it is highly recommended that you have an operating agreement. Operating agreements and governing documents are recognised by the state of Delaware.
Step 6. Get an EIN for Your Delaware LLC
Basically, an employer identification number (EIN) is a social security number for your LLC in Delaware.
To identify your LLC for tax purposes, the Internal Revenue Service assigns a nine-digit Employer Identification Number (EIN). You can apply for your EIN either by mail or online.
An EIN is used for the following purposes:
- Manage state and federal taxes
- Create a business bank account
- Hire employees
Where can I find an EIN? The IRS offers a free EIN. Getting an EIN is simple and may be done online or by mail.
Get an EIN Number in Delaware
Getting an EIN number is easy and free, There are two ways to get an EIN number in Delaware.
The 1st option is:
Apply online for an EIN from the IRS
The 2nd option is:
Get an EIN by Mail or Fax
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
To conduct business, a one-member LLC can either use the single owner’s Social Security Number (SSN) or obtain a separate Employer Identification Number (EIN). If the LLC is a multimember LLC, an EIN is also required.
When you apply for an EIN, you will be informed of the various tax classification options available to you. The default tax status is chosen by the majority of LLCs.
Some LLCs, on the other hand, can reduce their federal tax liability by electing the S corporation (S corp) status.
The IRS requires that sole proprietorships get a new EIN when they convert to an LLC.
An SSN is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at 267-941-1099 to complete your application.
Step 7. Franchise Tax
In Delaware, all limited liability companies (LLCs) must file and pay an annual franchise tax. This can be done online.
Fee: None
Tax Calculation: All LLCs will be charged $300.
Due Date: On or before June 1st, you must file and pay your taxes.
Late Filings: If you miss the June 1st filing deadline, you will be fined $200 plus 1.5 percent interest per month.
Are you Looking for Delaware LLC Formation Service?
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What to do After Forming Your Delaware LLC
Keep your personal and business assets separate
Your personal assets (such as your home, car, and other valuables) may be at risk when your Delaware LLC is sued if they are mixed with your business accounts.
Here are some steps you can take to protect your LLC in Delaware:
1. Create a Business Plan:
If you decide that a Delaware LLC will be a good choice for your business in Delaware, your next step is to create a business plan (although it is not required), so that you have a roadmap for what you will do and how you will accomplish it.
Free: Business Plans Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
2. Open a Bank Account
As soon as your LLC is officially formed, you should open a business bank account. Why? Keeping separate bank accounts will help you maintain the legal distinction between the LLC and you (the owner).
Because LLCs are limited liability companies, creditors and litigants can’t take your assets.
It is essential for small business owners to partner with the right bank. Find out which banks offer the best business checking accounts, have low or no fees, ATM accessibility, and interest-earning accounts as well as online or mobile banking tools.
Recommended: Check out our business bank account page to learn which banks offer the best business check accounts, ATM access, interest-bearing accounts, and online and mobile banking options for businesses.
3. Obtaining a business credit card:
- Allows you to separate personal and business expenses.
- Develops your company’s credit history, which can be helpful to raise capital (e.g., small business loans) later.
4. Hiring a business accountant:
- It prevents your business from overpaying taxes while preventing penalties, fines, and other costly tax mistakes.
- Gives you more time to focus on your growing business by simplifying bookkeeping and payroll.
- Manage your business’s funding more effectively. Find out where extra profit or loss can be made
Getting Business Insurance for Your LLC
You can manage risks and grow your LLC with business insurance. Here are the most common types:
- General liability insurance protects your business from lawsuits. Most small businesses purchase general liability coverage.
- Professional liability insurance protects professionals and businesses from claims of negligence from their clients or customers. Liability insurance typically covers negligence, copyright infringement, personal injury, and more.
- Workers’ compensation insurance: Covers illnesses, injuries, and deaths resulting from a worker’s work.
Want to know more about business insurance? Here is a comprehensive article about 10 types of small business insurance and how much small business insurance costs.
Ready to Protect Your Business
Let us help you with your business insurance needs.
- General business liability insurance
- Medical insurance
- Term life insurance
- Workers’ Comp
- Surety bonds
- Commercial auto
Create Your Business Website
A website is an important step in legitimizing your business. It is essential for all businesses. You are missing out on a large percentage of potential customers and revenue if you don’t have a website, even if your business is too small or in an offline industry.
More than 90% of consumers begin their search for products and services online. If you don’t have a website that is ready to welcome your customers, then they will simply find your competitors.
Here are the main reasons why you shouldn’t delay building your website:
- Every respectable firm has a website. When it comes to getting your firm online, size or sector isn’t a concern.
- Creating a basic website has never been easier, thanks to website builder tools like the GoDaddy Website Builder. To design a website, you don’t need to hire a web designer or developer.
Recommended: If you want to enhance your conversion rates and maximize revenue in order to help expand your business and meet objectives, you should always hire a professional business website design company to build your business website.
Wise Business Plans is a leading web design company, We have created over 2000 + websites across 20 countries for our clients but we are physically based in 7 major cities in the United States including Alabama web design, Pennsylvania, Las Vegas, Colorado Springs, Iowa, Michigan and San Diego.
Delaware LLC FAQs
A Delaware limited liability company (LLC) costs $90 to form online. When filing the LLC’s Certificate of Formation, this fee is paid to the Delaware Department of State.
- Custom LLC Business Structure and Rules.
- Defending Your Assets Against Creditors.
- Personal Liability of Members is Limited by Statute.
- The IRS provides you with preferential tax treatment.
- Minimal Requirements and a Simple Start-Up
If you file online, you can form an LLC in Delaware in 9-11 weeks (or 10-12 weeks if you file by mail). You can pay for expedited processing if you need your Delaware LLC sooner.
How to dissolve a Delaware Limited Liability Company (LLC)
- Consult the LLC Operating Agreement
- Participate in a Member Vote.
- To wind up the LLC’s affairs, appoint a manager.
- Pay current and future creditors before paying members.
- The Delaware Franchise Tax must be paid.
- Members of the LLC should be paid.
- Obtain a Certificate of Cancellation and file it.
Since 1996, Delaware has enabled the formation of a series LLC. An LLC can form series of members, managers, interests, and/or assets under the Delaware Limited Liability Company Act (the “DLLCA”) by allowing for such a series structure in the LLC agreement.
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