Our picks for LLC formation services

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FAQs

Can a non-US resident form an LLC in Delaware?

Yes, non-US residents can form an LLC in Delaware. However, they may need to appoint a registered agent and comply with any additional requirements for foreign-owned LLCs.

How long does it take to form an LLC in Delaware?

The processing time for forming an LLC in Delaware typically takes around 1-2 weeks. However, expedited processing options are available for an additional fee.

Can I change the name of my LLC after formation?

Yes, you can change the name of your LLC after formation by filing a Certificate of Amendment with the Delaware Division of Corporations. The process typically involves submitting the necessary form and paying the required fee.

What is the difference between an EIN and a DUNS number?

An Employer Identification Number (EIN) is a unique nine-digit number issued by the IRS for tax purposes. A DUNS number, on the other hand, is a unique nine-digit identification number assigned by Dun & Bradstreet to identify businesses. While an EIN is required for tax purposes, a DUNS number is often used for credit and business reporting purposes.

Can I operate my LLC in Delaware without a physical office?

Yes, you can operate your LLC in Delaware without a physical office. Delaware law allows LLCs to have a virtual office or use the physical street address of a registered agent as their principal place of business.

What is the annual franchise tax for LLCs in Delaware?

The franchise tax for LLCs in your home state is based on the number of authorized shares or assumed par value capital. The exact calculation can vary depending on various factors, and it’s advisable to consult with a tax professional for accurate information.

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For new companies, forming an LLC is often the best option as it is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Additionally, LLCs often enjoy a lower tax rate than corporations. However, forming an LLC can be a little complicated, and each U.S. state has a unique checklist for starting an LLC with minor procedural variations.

1. Select a name for your Delaware LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the state of Delaware:

  1. Your LLC name must be distinguishable from the names of existing business entities on file with the Delaware Division of Corporations.
  2. Your LLC name must contain the words “Limited Liability Company”, or one of the abbreviations, “L.L.C.” or “LLC”.

Need help coming up with a business name? Check out our free business name generator.

Reserve your LLC name with the Secretary of State

After selecting a name for your LLC, you may reserve it with the Delaware Division of Corporations. Search the Delaware Division of Corporations’ business name database to confirm that your chosen LLC name is available. If the name is free to use, you can reserve it online for up to 120 days. The filing fee is $75.

An alternative is to print out and complete an Application for Reservation of Limited Liability Company Name and mail it to the Division of Corporations.

Fictitious Business Name option

LLCs in Delaware are legally entitled to use an alternative name to do business instead of the one listed in its Certificate of Formation. However, in order to do so, you are required to register your fictitious business name in the Delaware county where your LLC is active. This is done by filing a Registration of Trade, Business & Fictitious Name Certificate with a Superior Court Clerk and paying the $25 filing fee.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Delaware requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or a business entity with a street address in Delaware. For help finding a Delaware registered agent, browse this list of registered agents provided by the Delaware Division of Corporations.

Our picks of the best registered agent services

  • Northwest Registered Agent: Starting a business requires a lot of state-mandated paperwork, which can be confusing for new business owners. Northwest offers business services that can help entrepreneurs find the right documentation, fill it out, and file it on time with the right government agency. In addition to helping you set up an LLC, Northwest has a host of additional services, like registered agent services, that new owners will find useful too.
  • ZenBusiness: There’s no need to stress about filing paperwork when you work with ZenBusiness. This company offers a great variety of LLC services, the focus of which is to ensure your business is set up correctly with the proper paperwork filled out and delivered to the right branch of your state government. Of course, ZenBusiness does charge for their services, but customers say they get the most bang for their buck.
  • Harbor Compliance is a great fit for organizations that register in multiple states and for those who don’t want to pay excessive service fees. With their network and electronic document delivery, they help ensure your business never misses a legal notification.

FAQs

Can a non-US resident form an LLC in Delaware?

Yes, non-US residents can form an LLC in Delaware. However, they may need to appoint a registered agent and comply with any additional requirements for foreign-owned LLCs.

How long does it take to form an LLC in Delaware?

The processing time for forming an LLC in Delaware typically takes around 1-2 weeks. However, expedited processing options are available for an additional fee.

Can I change the name of my LLC after formation?

Yes, you can change the name of your LLC after formation by filing a Certificate of Amendment with the Delaware Division of Corporations. The process typically involves submitting the necessary form and paying the required fee.

What is the difference between an EIN and a DUNS number?

An Employer Identification Number (EIN) is a unique nine-digit number issued by the IRS for tax purposes. A DUNS number, on the other hand, is a unique nine-digit identification number assigned by Dun & Bradstreet to identify businesses. While an EIN is required for tax purposes, a DUNS number is often used for credit and business reporting purposes.

Can I operate my LLC in Delaware without a physical office?

Yes, you can operate your LLC in Delaware without a physical office. Delaware law allows LLCs to have a virtual office or use the physical street address of a registered agent as their principal place of business.

What is the annual franchise tax for LLCs in Delaware?

The franchise tax for LLCs in your home state is based on the number of authorized shares or assumed par value capital. The exact calculation can vary depending on various factors, and it’s advisable to consult with a tax professional for accurate information.

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3. File a Certificate of Formation

After reserving an LLC name and appointing a registered agent, you can form your LLC by filing a Certificate of Formation with the Delaware Division of Corporations. The certificate must be filed by fax or postal mail and the filing fee is $90.

Your Certificate of Formation must provide the following details:

  • LLC name
  • LLC address
  • Registered agent name and address
  • LLC organizer(s) signature(s)

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Delaware, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

  1. Describe the LLC’s business structure
  2. Establish the individual responsibilities and obligations of LLC members
  3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

Obtain business licenses

LLCs that do business in Delaware are required to obtain a state business license from the Delaware Division of Revenue. The Delaware business license can be acquired by registering online with the Delaware One Stop Licensing and Registration Service or by printing a Combined Registration Application Form and mailing the completed form to the Division of Revenue.

Check with the local government too. Additional licenses, permits, or certifications may be required at the local level. Consult with a city clerk in the city where your LLC is based for information on local licensing requirements.

Understand Delaware taxes

An LLC in Delaware is treated as a pass-through entity, which means any income made by your business is passed to your personal tax return. You’ll pay state and federal taxes on that income, but it’s filed on your personal taxes. Your business does not pay separate taxes.

To ensure compliance with Delaware tax laws, it’s advisable to consult with a tax professional or accountant who can assist you in understanding the specific tax obligations for your LLC. They can help you navigate the tax landscape and ensure your LLC remains in good standing with the state.

  • Alternative Entity Tax: Each year, Delaware LLCs and foreign LLCs doing business in Delaware are obligated to pay an annual $300 Alternative Entity Tax to the Delaware Division of Corporations Franchise Tax Section. The tax is due each year by June 1.
  • Delaware tax rates: Delaware levies a 2-6% tax rate, which is broken up by income brackets. Anyone earning an income of $60,000+ is subject to a 6% tax rate.
  • No sales or property tax: One of the significant advantages of forming an LLC in Delaware is that the state does not impose sales tax. Additionally, Delaware does not have personal property tax, which can further reduce the tax burden on your LLC. However, it’s important to note that while Delaware does not impose sales tax, businesses operating within the state may still be subject to other taxes like state income tax.
  • Register to pay state LLC taxes: Certain LLCs, including those that collect sales tax and those that have employees, must register with the Delaware Division of Revenue. The registration process varies depending on an LLC’s tax obligations.

Understand BOI reporting 

Aside from annual reports in Delaware, a new federal law requires Beneficial Ownership Information (BOI) to be reported to FinCEN, in order to enhance transparency and prevent financial crimes.

Any businesses formed in 2024 must be reported within 90 days of your confirmation of formation. If your Delaware LLC was formed prior to 2024, you have until Jan 1, 2025 to complete this. After 2025, the limit will become 30 days.

The information requested includes the name, date of birth, address, and identifying details from a government-issued ID (such as a driver’s license or passport) for each beneficial owner.

This reporting is not an annual requirement; businesses only need to file once, unless there are changes to the reported information. By understanding and fulfilling the BOI reporting requirements, you can ensure that your LLC remains in good standing and continues to operate legally in Delaware.

Learn more about BOI reporting.

LegalZoom can help you file a compliant and stress-free BOI Report for only $149.

FAQs

Can a non-US resident form an LLC in Delaware?

Yes, non-US residents can form an LLC in Delaware. However, they may need to appoint a registered agent and comply with any additional requirements for foreign-owned LLCs.

How long does it take to form an LLC in Delaware?

The processing time for forming an LLC in Delaware typically takes around 1-2 weeks. However, expedited processing options are available for an additional fee.

Can I change the name of my LLC after formation?

Yes, you can change the name of your LLC after formation by filing a Certificate of Amendment with the Delaware Division of Corporations. The process typically involves submitting the necessary form and paying the required fee.

What is the difference between an EIN and a DUNS number?

An Employer Identification Number (EIN) is a unique nine-digit number issued by the IRS for tax purposes. A DUNS number, on the other hand, is a unique nine-digit identification number assigned by Dun & Bradstreet to identify businesses. While an EIN is required for tax purposes, a DUNS number is often used for credit and business reporting purposes.

Can I operate my LLC in Delaware without a physical office?

Yes, you can operate your LLC in Delaware without a physical office. Delaware law allows LLCs to have a virtual office or use the physical street address of a registered agent as their principal place of business.

What is the annual franchise tax for LLCs in Delaware?

The franchise tax for LLCs in your home state is based on the number of authorized shares or assumed par value capital. The exact calculation can vary depending on various factors, and it’s advisable to consult with a tax professional for accurate information.

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how to start an llc step by step infographic

Post LLC tasks

Set up business bank accounts

Once your LLC is formed, it’s time to set up a business bank account. Having a separate bank account for your LLC is essential for maintaining clear financial records and separating personal and business finances.

What you need to set up a business bank account: To set up a business bank account for your LLC, you will need to gather the necessary documentation. This typically includes:

  • Delaware LLC formation documents
  • Employer Identification Number (EIN) issued by the IRS
  • Any other documents required by the bank. (It’s advisable to contact the bank beforehand to inquire about their specific requirements).

Choosing the right bank: When choosing a bank for your LLC, consider factors such as fees, account features, and convenience. Look for a bank that offers business-specific accounts and services tailored to the needs of an LLC. It’s also worth considering a bank that provides online banking and mobile app access to manage your LLC’s finances conveniently. Some that are popular for new LLCs include Found, Relay, and Mercury.

Once your business bank account is set up, ensure that you use it exclusively for your LLC’s financial transactions. This will help maintain accurate records and simplify tax preparation. Regularly monitor your account for any fraudulent activity and keep your financial records organized for easy reference.

Obtain a Certificate of Good Standing

Obtaining a Certificate of Good Standing is an essential step in maintaining compliance and credibility for your LLC in Delaware. This document serves as proof that your LLC is registered and in good standing with the state. It may be required for various purposes, such as entering into contracts or obtaining financing.

How to get one: To obtain a Certificate of Good Standing for your LLC, you must request it from the Delaware Division of Corporations. The process typically involves submitting an application, and there is no fee. Before applying for the certificate, it’s important to ensure that your LLC is in compliance with all Delaware state requirements. This includes timely filing of annual reports and payment of any necessary state fees. Failure to maintain compliance may result in the LLC losing its good-standing status.

Keep it on file: Once you have obtained the Certificate of Good Standing, keep it in a safe place and make copies for your records. This document may be requested by various parties, such as banks, lenders, or potential business partners.

Building a website for your LLC

In today’s digital age, having a website for your LLC is essential for establishing an online presence and attracting potential customers. Building a website may seem like a daunting task, but with the right approach, it can be a relatively straightforward process.

When you’re ready to launch a website, follow these steps:

  1. Search for and purchase a domain name.
  2. Sign up for web hosting.
  3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
  4. Tailor your site to your customers, adding appropriate pages, content, and images.
  5. If you’re selling goods, add an e-commerce section to your site.
  6. Review, test, and publish your site.

Domain name availability is a priority: Firstly, you need to choose a domain name for your website. Ideally, the domain name should be relevant to your LLC’s name or the products/services you offer. It’s important to select a domain name that is easy to remember and reflects your brand identity – this is easy with services like Domain.com and GoDaddy.

Costs to set up an LLC in Delaware

Average set-up costs for a Delaware LLC: $90-$390

Starting your own Limited Liability Company (LLC) in Delaware can be an exciting venture. However, before diving into the process, it’s important to understand the cost involved. Setting up an LLC in Delaware requires certain fees and expenses that vary depending on your LLC’s type of business.

Incorporation fees: One of the primary expenses to consider is the filing fee. In Delaware, the filing fee for forming an LLC is $90. This fee covers the cost of processing your LLC formation documents. There may be additional fees if you choose to expedite the processing time: for same-day processing, it is $100; for 24 hours, it is $50; and it can be done in two hours for $500 or even one hour for $1,000.

Registered agent service fees (optional): Entrepreneurs can hire a registered agent rather than appoint one. While an owner or employee can serve as a registered agent and accept confidential paperwork on behalf of the company, you can also entrust that task to a professional registered agent service. If you choose to do so, you’ll pay an annual fee ranging between $50 to $200.

Foreign LLCs

LLCs formed outside of Delaware that intend to do business in the state must register with the Delaware Division of Corporations.

Foreign LLCs must complete the following steps in order to legally operate in Delaware:

  1. Comply with Delaware LLC naming guidelines and confirm that your LLC name is available for use in the state.
  2. Appoint a Delaware-based registered agent to handle service of process.
  3. File a Certificate of Registration of Foreign Limited Liability Company with the Delaware Division of Corporations. The filing fee is $200.
  4. Along with the Certificate of Registration, your LLC must also file a Certificate of Existence from the state in which the LLC was formed. The Certificate of Existence must be dated within 6 months prior to the Certificate of Registration.

 

FAQs

Can a non-US resident form an LLC in Delaware?

Yes, non-US residents can form an LLC in Delaware. However, they may need to appoint a registered agent and comply with any additional requirements for foreign-owned LLCs.

How long does it take to form an LLC in Delaware?

The processing time for forming an LLC in Delaware typically takes around 1-2 weeks. However, expedited processing options are available for an additional fee.

Can I change the name of my LLC after formation?

Yes, you can change the name of your LLC after formation by filing a Certificate of Amendment with the Delaware Division of Corporations. The process typically involves submitting the necessary form and paying the required fee.

What is the difference between an EIN and a DUNS number?

An Employer Identification Number (EIN) is a unique nine-digit number issued by the IRS for tax purposes. A DUNS number, on the other hand, is a unique nine-digit identification number assigned by Dun & Bradstreet to identify businesses. While an EIN is required for tax purposes, a DUNS number is often used for credit and business reporting purposes.

Can I operate my LLC in Delaware without a physical office?

Yes, you can operate your LLC in Delaware without a physical office. Delaware law allows LLCs to have a virtual office or use the physical street address of a registered agent as their principal place of business.

What is the annual franchise tax for LLCs in Delaware?

The franchise tax for LLCs in your home state is based on the number of authorized shares or assumed par value capital. The exact calculation can vary depending on various factors, and it’s advisable to consult with a tax professional for accurate information.

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