A limited-liability company (LLC ) provides liability protection and tax benefits, as well as other benefits to small businesses.
It’s easy to form an LLC in Delaware. Follow these seven steps and you will be well on your way to Delaware LLC formation.
1. Name Your Delaware LLC
Before you can register an LLC, you will need to choose a name for your articles.
Names must conform to Delaware’s naming requirements. These are the most important requirements you should keep in mind.
- Your business name should include the words Limited Liability Company (LLC), LLC, or L.L.C.
- You must have a name that is different from any existing business in the state. To determine whether a specific business name is being used, you can search the website of Secretary of State. This link will show you the availability of Delaware name information.
- The name of the business cannot include words that could be used to identify a government agency (e.g. State Department, CIA FBI, Treasury, Treasury, etc.).
- Some words are restricted (bank, lawyer or attorney, credit union, etc.). Additional documentation and licensure paperwork may be required.
See a complete listing of Delaware’s naming rules.
- URL availability. Even if you think you won’t need one, it’s likely that you will. You should at least reserve the possibility of purchasing a domain name in the future. It’s a good idea not to finalize your LLC name without checking if the URL is still available.
- You can reserve your name. Oklahoma allows names to be reserved up to 120 days after payment of the fee and submission of the appropriate form to the state authority.
2. Select Your Agent
Oklahoma requires that you appoint an agent registered for your LLC.
A registered agent can be the person or entity that is authorized to receive service of legal documents and notices for your LLC.
You can be a registered agent or an entity offering a registered agent service. These criteria must be met:
- Companies and entities must offer registered agent services.
- An address must be provided by the agent in Delaware.
- The agent must be present on the spot and available during normal business hours to sign documents.
3. Prepare and file a Certificate of Formation of Limited Liability Company
The Certificate of Formation (also known as Articles of Organization in some states) is a document that establishes your LLC and provides basic information about it.
To register your Delaware LLC, prepare a Certificate of Form and file it with the Delaware Division of Corporations. Although it may sound daunting, it is actually quite simple. All you have to do is fill out an online form and submit it. It can also be sent by mail.
The following information is necessary to prepare your articles:
- Your LLC name.
- The registered agent of the LLC.
- The address at the street level of the LLC’s principal business location.
- Signature of an authorized person
The Delaware Division of Corporations will examine your Certificate of Formation once it is filed. The LLC is legal business entity once the certificate has been approved.
4. Get a Certificate from the State
After the LLC’s documents have been filed and approved by the state, the certificate will be issued by the state.
This certificate will enable the LLC to get an Employer Identification Number, business licenses and a business bank account.
5. Make an Operating Agreement
A operating agreement describes the business model of your LLC.
Although Delaware doesn’t require an operating agreement to operate a business, it is essential. A written, easily accessible operating agreement can be helpful for many reasons. It will help you settle disputes about financial agreements or other potential litigation. The courts will make decisions based on state law and not necessarily in the best interests of the LLC or its members if there is no agreement.
The following are examples of operating agreements that can be included in an operating agreement:
- Name and address of the principal office of an LLC
- The LLC’s duration
- Name and address for the registered agent
- Information about the Articles of Organization
- The purpose of the business
- Members and their contributions
- Profits and losses will be split in the following manner:
- The procedure for admitting new members and outgoing members
- Management of the LLC
- Clauses of indemnification and liability
6. Register for an Employer Identification number
To identify your LLC for tax purposes, the Internal Revenue Service assigns a nine-digit Employer ID Number (EIN). has nine characters. Your EIN can be obtained online or by mail through the IRS.
An EIN serves the following purposes:
- Filing and managing taxes at both the federal and state levels
- Openyear is a bank account for businesses
- Employ employees.
7. You can pay an alternative entity tax
Delaware LLCs are required to pay an annual alternative entity tax, sometimes called annual tax. This tax is $300 and due every year on June 1.
Your LLC registration gives you legal basis to run your business. Keep your LLC in compliance and active on the state’s site.
Delaware LLCs do not need to file an annual report. If you sell goods or have employees, you may be required to pay gross receipts tax. You will also need quarterly tax payments.
You can also register your LLC to allow you to do these things:
- To operate your business, you will need permits and licenses. This includes health department permits and zoning permissions. You also need professional licenses, home occupation permits, and licenses for other professions. To conduct sales, some states require a seller’s permit.
- Register your company with the state tax agency.
- Register for a bank account in your business.
- Apply for a Business Credit Card
- Get insurance for your business.
- A trademark can protect your logo and name.