Delaware LLC Formation Guide (April 2024)

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This guide to setting up an LLC Delaware includes steps-by-step directions on how to file documents, get tax IDs, set up company records, and other pertinent information.

Overview

Because LLCs are relatively inexpensive, flexible, and easy to operate, they are the most common business structure. The legal formation of an LLC allows you to establish your business, limit your personal liability, and gives you tax flexibility. You will find the steps below helpful as you complete this process.

Instructions for Delaware LLC,

  1. Check Name Availability

    Your LLC’s legal title may not conflict or be used in conjunction with another registered name. Conduct a name look to verify availability.

    Name Search Delaware Department of State- Division of Corporations

    Name search
    Name Reservation Optional
    Suffix: Shall contain “Limited Liability Company”, or the abbreviation L.L.C.” Oder the designation “LLC”.

    DC §18-102

  2. Get a Registered Agent

    Before you can officially file to form your Delaware LLC you need to choose who your Delaware registered representative will be. A registered agent allows a business to be notified of any legal or government notices.

    A registered agent is required by law in every state. When you file Delaware articles of organisation with the Delaware Department of State Division of Corporations (Department of State), the registered agent is identified.

  3. Delaware Certificate for Formation

    Register the articles to form a limited liability corporation.

    Agency: Delaware Department of State- Division of Corporations
    Form:
    Certificate certifying the formation of a Limited Liability Company
    Filing Method Fax or mail
    Agency Fee $90 + optional $50 – $1,000 expedite fee
    Turnaround: ~3 weeks. For $50 state expedite fee, it takes 24 hours. Same-day service for $100 state fee. 2hrs for $500 state fee expedite fee. 1 hour to pay $1000 state expedite tax.
    Law:
    Delaware Code. Title 6: Commerce and Trade. Chapter 18. Limited Liability Company Act
    Notes: Include a cover letter.

  4. Establish Company Records

    Your LLC must maintain correct and complete books, records, and financial statements. Your LLC’s documents begin with your filed articles. Your LLC will produce other official records like:

    • Minutes of a meeting
    • Operating agreement
    • EIN verification letter
    • Amendments and other filings made by the LLC throughout its existence

  5. Sign the Operating Agreement

    You can draft an Operating Agreement by using a template. This is the governing document that governs the LLC. It describes the details of how the LLC operates, such as the holding of an annual meeting. At your organizational meeting you will review and approve the agreement.

  6. Host the Organizational Meeting

    The organizational meeting is a first meeting of LLC members. For this meeting you will need your operating agreement and filed articles of organisation. Keep a log of the meeting, and save it in your company’s record book.

  7. Get a Federal Employee Identification Number (EIN).

    EINs must be obtained if your LLC employs more than one person or has multiple members. EIN is often required to open bank accounts.

    Agency: Internal Revenue Service
    Form:
    IRS SS-4
    Filing Method Mail, phone, or Online.
    IRS fee $0
    Turnaround: Instantly online or by phone 4 business day by fax. 4-5 weeks by mail
    Notes: The IRS website can only be accessed during specific hours. Print your EIN before you close the session. For additional guidance, refer to IRS Publi 1635: Understanding Your.

  8. Delaware State Tax Identification Nos/Accounts

    Delaware LLCs require a Delaware Business License and must pay the Gross Receipts Tax. Delaware LLCs also have to register with Division of Revenue for any other tax accounts. Delaware offers a consolidated form to register your company with the Division of Revenue.

    Submit to
    Delaware Division of Revenue

    http://revenue.delaware.gov/

    Form:

    Withholding Agent: Combined Registration for State of Delaware State Business License.
    Filing Method
    Mail or Online
    Fee:
    $75 for the initial business license. Fees can vary depending on which licenses you have, where you are located, and what accounts you have.

    Register with the Delaware Department of Labor and pay a $0 state fee.

  9. Consider Electing C-Corp taxation or S-Corp governance

    Your LLC automatically receives pass through taxation. The vast majority of LLCs however, keep this tax category. Some LLCs have the option to choose S-Corporation or C-Corp tax treatment.

    • S-Corp may be able to help owners who earn more that $75,000 per calendar year in saving on self-employment taxes.
    • C-Corps have double taxation. Members pay taxes on the profits of the corporation, while members pay taxes when they receive their distributions. C-Corps can offer lower tax rates to retained earnings.

  10. Get business licenses & permits

    The necessary licenses or permits are required in order to operate your business legally. Searching by business type and location using the Small Business Administration Business License & Permit search tool is the easiest way to find out about the diverse requirements of the federal, state, or local governments.

    Delaware Business License General Services

    Agency: Delaware Department of Finance Division of Revenue
    Law:
    30 DE Code SS 2101
    Notes: Anyone or any entity operating a business or trade within the State of Delaware must obtain a Delaware business permit from the Delaware Division of Revenue. This includes Delaware businesses that are located outside of Delaware. If you’re unsure whether you have a substantial presence within Delaware and are subject to licensing and taxation you can complete the Nexus Survey. The Delaware Division of Revenue provides guidance.

    Initial Registration

    Registration renewal

  11. Keep your LLC afloat with ongoing filings

    Federal and state tax returns must be filed.

    For good standing with their secretary of state, many states require business entities to file an annually required report. Below is a table that explains whether an annual report must be filed for Delaware-based LLCs.

    Domestic Delaware Corporation Annual Report Required:

    Agency: Delaware Department of State- Division of Corporations
    Filing Method
    Online
    Agency Fee Annual Report Fee $50 + Franchise Tax (minimum $175).
    Due: Each March 1. The first report is due within the calendar year after initial registration.
    Law:
    Delaware Code Title 8 Title 5 SS 502
    Original Ink Not required
    Notarize: Not required
    Penalties: Failure to submit the report and to pay franchise taxes could result in a $200 penalty and 1.5% interest per monthly on the tax and penalty.
    Notes: The report must be signed either by the corporation’s president or secretary, treasurer or any other officer duly authorized to act, or by any directors of the corporation, or by any incorporator if its board has not been elected (Title 8. Chapter 5 SS502 (a).

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