How to Start LLC in Delaware Step-by-Step Guide
Starting Delaware LLC, step-by-step
Here are the steps to forming an LLC in Delaware:
- Choose an LLC Name
- Select a Registered Agent
- File the Certificates of Formation
- Create an Operating Agreement
- Get an EIN
- Get a Business License and Permits
If you want to form your LLC yourself, follow our comprehensive guide below at no cost.
For further details on LLC expenses, Explore the specifics of LLC costs in Delaware.
See "How Long Does It Take to Form an LLC in Delaware" to find out how long it will take to get your LLC approved and to make sure there are no delays.
Need to save time?
Consider hiring a professional to set up your LLC: Northwest Registered Agent offers LLC formation services starting at $39 plus the state fee.
(Find out why Northwest is the top choice for LLC formation)
Here are the steps to forming an LLC in Delaware
1. Search for your Limited Liability Company (LLC) Name
To ensure your Delaware LLC name is available and meets state requirements, follow these steps
First, search your business name. Entity Search tool to ensure it's unique and not already in use.
This is necessary because two businesses in the state cannot share the same name.
Second, check domain availability for an online presence Select a name that is memorable to the customer and best suited for the brand.
We'll explore the specifics of naming an LLC in Delaware in greater detail.
How do I check if my desired LLC name is available?
You can check the availability of your desired LLC name by searching the Delaware Division of Corporations.
What are the naming requirements for the Delaware LLC?
The name must include "Limited Liability Company," "LLC," or "L.L.C." It must be distinguishable from other business names registered in Delaware and should not contain restricted words without approval.
Can I reserve a name for my LLC?
You can reserve a name for up to 120 days by filing a Name Reservation application with a $75 cost.
2. Find a Registered Agent in Delaware
The next step is to select the Delaware Registered Agent.
A person or organization appointed to accept official notices and legal communications on behalf of your LLC may function as your LLC's registered agent in Delaware. To carry out this function efficiently, they must have a physical address inside the state.
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Who is eligible to serve as an LLC Registered Agent?
Your LLC's registered agent can be you.
- A trusted friend or family member
- A professional Registered Agent Service
- You
They must have a physical address in Delaware, as PO Boxes are not acceptable.
The Registered Agent's details are available to the public in state records.
If you prioritize privacy or lack a physical Delaware address, a Registered Agent Service could be beneficial.
What is a Registered Agent?
A Registered Agent is a person or entity designated to receive legal documents and official government communications on behalf of the LLC.
Who can be a Registered Agent in Delaware?
The Registered Agent can be an individual resident of Delaware or a business entity authorized to do business in Delaware. The agent must have a physical street address in Delaware (no P.O. boxes).
Can I act as my Registered Agent?
Yes, if you meet the residency and physical address requirements, you can act as your Registered Agent.
3. File a Delaware LLC Certificate of Formation
Prepare and submit the Certificate of Formation to the Delaware Division of Corporations.
Guide for completing the certificates. Including details like your name and registered agents.
Filing the Delaware LLC certificates of formation costs $90 when submitted online. This is a one-time cost to create your LLC.
If you want to file this yourself, see our step-by-step guide: ?.
How do I file the Certificate of Formation?
You can file the Certificate of Formation online or by mail with the Delaware Division of Corporations, Business and Professional Licensing. The filing fee is $90.
What information is required in the Certificate of Formation?
The Certificate of Formation must include the LLC’s name, principal office address, registered agent information, and the names and addresses of the organizers.
How long does it take to process the Certificate of Formation?
Processing times can vary. Online filings are typically processed within a few business days, while mail filings may take longer.
4. Create the Delaware LLC Operating Agreement
Delaware LLC Operating Agreement is like a companion document certificate of formation. The certificates create your LLC, while the Operating Agreement explains who owns it.
Banks may require it to open your LLC business bank account, and it is important in court to prove your LLC is running correctly.
That's why we recommend that all LLCs, including Single-Member LLCs, have an Operating Agreement.
Operating Agreement is essential in legal proceedings because it serves as evidence that your LLC operates by proper governance practices, bolstering your defense in court.
An Operating Agreement is an internal document, so you don’t need to file it with the IRS. Just keep a copy in your business records for your reference.
Need to save time?
Consider hiring a professional to set up your LLC: Northwest Registered Agent offers LLC formation services starting at $39 plus the state fee.
(Find out why Northwest is the top choice for LLC formation)
What is an Operating Agreement?
An Operating Agreement is a document that outlines the ownership, management structure, and operating procedures of the LLC.
Is an Operating Agreement required in Delaware?
While not legally required, it is highly recommended to have an Operating Agreement to establish clear rules and prevent disputes.
What should be included in an Operating Agreement?
The Operating Agreement should include details on member roles and responsibilities, voting rights, profit distribution, management structure, and procedures for adding or removing members
5. Get an EIN for LLC
Getting a Delaware EIN from the IRS for LLC.
An EIN (Employer Identification Number) is needed for:
- Identifying tax purposes
- Open the business bank accounts
- Apply for licenses and permits
How do I apply for an EIN?
You can apply for an EIN online through the IRS, by mail, or by fax.
How much does an EIN cost?
Obtaining an EIN from the IRS comes at no cost. The application process is free.
How much time does it take to receive an EIN?
When applying online, you will receive your EIN immediately.
If you choose to apply by mail or fax, it can take at least four to five weeks.
Why do I need an EIN for my LLC?
An EIN is required for federal tax purposes, hiring employees, opening a business bank account, and fulfilling other business-related requirements.
6. Business licenses and permits of Delaware
Every LLC in Delaware must obtain a general business license from the Delaware Division of Corporations.
Additionally, depending on your LLC's location, you may also need to acquire local business licenses or permits.
Does every LLC in Delaware need to obtain a general business license?
Yes, every LLC operating in Delaware is required to obtain a general business license from the Delaware Division of Corporations.
Are additional local business licenses or permits required for an LLC in Delaware?
Depending on the location of your LLC within Delaware, you may need to obtain local business licenses or permits in addition to the general business license from the state.
What Should I Do after the LLC is Approved?
Business bank account for Delaware LLC
Opening a business bank account for your Delaware LLC is essential to keep personal and business finances separate. This separation helps maintain accurate financial records, simplifies tax filing, and protects your assets in case of legal issues.
Taxes for Delaware LLC
Delaware LLCs are subject to several taxes, including federal and state income taxes, sales taxes (if applicable), and payroll taxes if the LLC has employees. Understanding and complying with these tax obligations is crucial to avoiding penalties and maintaining good standing with tax authorities.
Annual Report Requirement
Delaware LLCs must file an Annual Report each year to the Delaware Division of Corporations. This report updates the state with any changes to the LLC's business details and requires payment of a filing cost. Keeping this report current ensures that your LLC remains in good standing and compliant with state regulations.