How To Get An LLC In Delaware In 6 Easy Steps

Overview

Getting an LLC in Delaware involves a straightforward process. Below, we’ll guide you through the essential steps and provide factual answers to common questions.

How To Get An LLC In Delaware: Step-By-Step

1. Choose a Name for Your LLC:
   • Choose a unique and available name for your LLC.
   • Perform a Delaware LLC name search through the Delaware Secretary of State website.
   • Reserve your chosen name if needed.
2. Registered Agent:
   • Appoint a registered agent with a physical address in Delaware.
3. File Certificate of Formation:
   • Complete the Delaware LLC Certificate of Formation form.
   • File online through the Delaware Secretary of State website or submit a paper application.
4. Operating Agreement:
   • Draft an operating agreement outlining the structure and operation of your LLC. Although not required by the state, it is highly recommended.
5. Employer Identification Number (EIN):
   • Obtain an EIN from the IRS for tax purposes.
6. File the Beneficial Ownership Information Report:
   • Beginning in 2024, Delaware LLCs must submit a Beneficial Ownership Information (BOI) Report.

1. Choose A Name For Your LLC

Check if the name you desire for your Delaware LLC is available in the state. This is important because no two businesses in Delaware can share the same name.

To do this, use the Secretary of State’s Business Entity Search tool to compare your business name with existing ones in Delaware. 

Make sure your LLC name is unique by following Delaware’s naming rules to increase the chances of your LLC name being approved.

If you need, you can reserve the name for your LLC for up to 120 days. The cost is $75.

2. Appoint Registered Agent 

In Delaware, you need to choose a registered agent for your LLC. This is the person or company allowed to get legal papers and important notices on behalf of your LLC.

Your registered agent can be a person, like yourself or one of your employees, or a company that offers this service.

The registered agent has to meet some requirements:

• If it is a company, it must offer registered agent services.
• The agent must have an address in Delaware.
• The agent must be there in person and ready to get documents during regular business hours.

3. File Delaware LLC Certificate of Formation

To officially establish your Delaware LLC, you need to file the Delaware LLC Certificate of Formation. 

This document provides essential details about your LLC and serves as the official registration.

To prepare the certificate, gather the following information: your LLC name, the name and address of the registered agent, specify the type of your LLC business, and provide the effective date if different from the filing date. 

The form is a straightforward online submission or can be sent by mail.

The Delaware LLC Certificate of Formation filing fee is $110. Plus, there may be an additional $50 for a certified copy.

Once filed, the Delaware Secretary of State will review the document, and upon approval, your LLC attains legal business entity status. 

You can undertake this process independently using our step-by-step guide or opt for the convenience of hiring a company for assistance.

4. Create An Operating Agreement 

An operating agreement is a document that shows how your LLC will do business. 

While Delaware doesn’t make it a must, having one is crucial. It helps in different ways, like resolving money disputes or potential legal issues. Without it, the courts decide based on state laws, not necessarily what’s best for the LLC.

The agreement can include things like the LLC’s name, address, how long it will last, the registered agent’s details, info from the Certificate of Formation, the business’s purpose, member contributions, how profits and losses are shared, rules for new and leaving members, how the LLC is managed, and clauses about protection and responsibility.

5. Obtain Employer Identification Number (EIN)

The Internal Revenue Service (IRS) gives your LLC a nine-digit number called an Employer Identification Number (EIN) to identify it for taxes. You can get your EIN by mail or online through the IRS.

This number helps you:

• File and handle taxes at both the state and federal levels.
• Open a bank account for your business.
• Apply for permits and licenses.
• Hire employees.

Obtaining an EIN is FREE.

6. File The Beneficial Ownership Information Report

Starting in 2024, many Delaware LLCs must submit a Beneficial Ownership Information (BOI) Report to the Financial Crimes Enforcement Network (FinCEN). 

This is a new rule, and the deadlines can be a bit confusing. For LLCs created in 2024, the report is due within 90 days of registering with the Delaware Division of Corporations. 

If your LLC was registered before 2024, you have until January 1, 2025. LLCs established in 2025 or later must file within 30 days of formation. 

The BOI Report requires details about the person who filed your Certificate of Formation (your LLC organizer) and all individuals with at least 25% ownership or substantial control over your LLC’s operations and finances.

Read BOI FAQs here.

Review: What Is Needed To Form An LLC In Delaware?

To form an LLC in Delaware, you need:

• A unique LLC name.
• Certificate of Formation
• Registered Agent information.
• Operating Agreement (recommended).
• Employer Identification Number (EIN).

What Forms Do You Need To Get An LLC In Delaware?

• Application to Reserve LLC Name
• Certificate of Formation (online)
• Certificate of Formation (PDF)
• EIN Application Form
• BOI Form

How Much Does It Cost To Start An LLC In Delaware?

The cost to start an LLC in Delaware involves several steps, each with its own associated fees:

• Certificate Of Formation Filing Fee: $110
• Certified Copy Fee (if needed): $50
• Name Reservation Fee (if needed): $75

What Is The Delaware Franchise Tax?

In Delaware, LLCs need to pay a Franchise Tax annually. 

The Delaware LLC Franchise Tax, required for doing business in the state, is an annual fee of $300.

How Long Does It Take For An LLC To Get Approved In Delaware?

If you send your LLC application by mail, it will be approved in 7-10 business days, plus the time it takes for the mail (2-3 weeks in total).

However, if you file online, your LLC can be approved in 7-10 business days.

What Are The Benefits Of Getting An LLC In Delaware?

• Limited liability protection for members
• Pass-through taxation
• Flexible management structure
• Credibility for business transactions

Is Delaware A Good State To Get An LLC?

Whether Delaware is the right state for your LLC depends on where you live and do business. If you live or operate in Delaware, it makes sense to start your LLC there. 

The state does impose an annual Franchise Tax of $300 on LLCs, which can have a negative effect on small businesses. 

Why Delaware Is Better For An LLC?

Choosing Delaware for your LLC formation provides robust protection, ease of maintenance, and flexibility in tax options. Delaware’s well-known reputation for shielding business owners from creditors makes it a preferred choice across businesses of varying sizes.

Getting An LLC In Delaware: Next Steps

Once your LLC is registered, you can:

• Get the permits and licenses you need for your business, like health or zoning permits.
• Register your business with the state’s tax agency.
• Open a business bank account.
• Apply for a business credit card.
• Buy insurance for your business.
• Safeguard your name and logo with a trademark.

To maintain your LLC in Delaware, you must:

• Pay the annual Franchise Tax by the due date (June 1st) to keep the LLC in good standing.
• Update any changes to the registered agent or business address promptly.
• Pay Taxes (owners file their individual tax returns)

Conclusion

Forming an LLC in Delaware involves a few key steps, from name reservation to obtaining an EIN. 

Carefully following the process ensures a smooth establishment of your LLC. 

For more detailed information and to access the necessary forms, visit the Delaware Secretary of State website.