Our Step By Step Guide

How to form a limited liability company in Delaware

Forming a limited liability company provides liability protection for any type of business, and should be among the first steps you take as a new business owner. Starting a limited liability company can help you protect your personal assets while adding legitimacy to your company. Follow our step by step guide or let us handle the paperwork on your behalf, ensuring your business is filed quickly and accurately.

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Why start your business in Delaware?

There are certain stereotypes that persist about the state of doing business in Delaware. One of the biggest myths is that Delaware is a tax haven. Entrepreneurs, in state and out of state, are often advised to incorporate in Delaware simply because of its corporate-friendly tax laws.

More than one million business entities, including LLCs, call Delaware their legal home. However, it's important to know that several other factors have led to Delaware's dominance in business formation. These factors focus on more than taxes. Additional benefits include an enabling statute, known as the Delaware General Corporation Law, the state's judicial system, and case law and lawyers that specialize in Delaware corporate law. Even the Delaware Secretary of State provides a wide range of services and resources for all entity formations, including Delaware LLCs.

As you can see, Delaware is a haven not just for tax purposes, but because the state offers a complete package of business entity services. Entrepreneurs interested in starting a Delaware LLC can get started by following these simple formation steps.

Two Ways to Register Your Business

MyCorporation® can help you file all of the necessary documents to form your limited liability company in Delaware.

File and submit the formation paperwork yourself

Our free guide provides you with all of the information you'll need to form your limited liability company in Delaware. Bookmark this page as a reference so you can return easily as you complete each step of the process.

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See other business types

Are you looking for another entity type? We offer several other guides for the state of Delaware.

One of the first decisions you'll need to make as a new business owner is which type of entity you will form for your business. While each business type offers its own benefits, forming an LLC (limited liability company) is one of the most popular choices made by new business owners across the United States. An LLC is a relatively new type of legal business formation, considered a hybrid entity, combining the pass-through taxation and simple operation of sole proprietorship with the limited liability protection provided by a corporation.

One of the main reasons for the growing popularity of the LLC is its simple setup and flexible structure. An LLC is also considered the easiest type of entity to maintain with the least number of annual requirements. Plus, income from the business is passed directly to its owners as regular income, making taxes much easier for an LLC, which can help you lowering your tax preparation costs each year.

Effective August 1, 2013, all LLCs formed in Delaware are required to file with the Delaware Division of Corporations. The Delaware Division of Revenue provides a resource known as the Legal Business Structure Table that determines how a Delaware LLC is taxed and its state-wide liability. LLCs formed in Delaware, for example, must pay $300 in annual franchise tax fees to the state.

The Benefits of an LLC

  • Protect your Personal Assets
    Starting a business designates your business as a separate legal entity, preventing you from being personally responsible for the debts of your business.
  • Build Credibility
    Establishing a professional identity provides the benefit of showing potential customers and investors that your business is legitimate and here to stay.
  • Simple Management
    Limited liability companies are less formal and require fewer annual / maintenance requirements than other common entity types, making it a popular choice for small business owners.

Compare the main entity types below

Entity Type
Liability
Taxation
Maintenance
Limited Liability Company Combines limited liability protection with a pass-through tax structure. IRS rules allow LLCs to choose between being taxed as partnership or corporation. The easiest entity to maintain with the least amount of formal annual requirements.
Corporation Owners / shareholders have limited personal liability for business related debts. Separate taxable entity, corporate profits among owners and corporation. Meetings are required to maintain corporate status. Stock may be sold to raise capital.
Non-Profit Corporation A corporation formed for a charitable, educational, religious, literary, or scientic purpose. Contributions to charitable corporation are tax-deductible. Can get tax exempt status with the IRS. Annual reports, minutes, meetings are required to maintain nonprofit / tax exempt status.
Tip: Try our free entity choice tool. Answer a few simple multiple choice questions about your business, and our tool can recommend the entity type that best fits the needs of your business.

The next step will be to decide on a name for your business. Choose a name that is memorable and unique, easy to understand and pronounce, and accurately represents your business. You'll want to search your name choices on the web to quickly find out if they are already taken. It's also best to jot down one or two alternatives, in case the name you settle on is not available for registration in Delaware.

Like most states, Delaware's Division of Corporations offers the ability to conduct a name search for your LLC. The Division of Corporations can determine if the business name you plan on registering conflicts with any other businesses already registered in the state of Delaware.

If you find the name of your business is available, you may reserve an entity name through the Delaware Division of Corporations. Reserve the name online (or submit a reservation application in the mail), pay a fee of $75, and your business name will be held for 120 days.

Tip: A business name check is included with every one of our business formation packages. We check with the state to determine the availability of your business name automatically. You can also conduct a nationwide business name search here.

There are two options to choose from when it comes to setting up your limited liability company in Delaware. "Member managed" or "manager managed". The first thing you need to know is that owners of any LLC are referred to as "members". A single member LLC has just one owner, while a multi-member LLC is an LLC owned by 2 or more members. Pretty simple, right?

Delaware LLCs also must also designate one or more individuals to manage the day to day operations of the business. This can be handled by one of the members of the business (member managed, the most popular choice and the default in most states), or a professional manager appointed by the members to act on their behalf (manager managed).

While the differences are subtle, what you really need to know is that each member in a member managed LLC has the power to make decisions for the business. However, in a manager managed LLC, the members choose who will manage the business and relinquish all of the decision making to the manager chosen. The person chosen can be one of the members of the business as well, or it can be someone else entirely.

Most states require that you designate a registered agent for your business, and Delaware is no exception. A registered agent acts as the state's means to communicate with a business and is responsible for receiving legal and official documents related to the business.

A registered agent can be anyone you wish, with one small caveat. The registered agent must have a physical address in Delaware. In other words, a P.O. Box is not allowed as a registered agent address. This means a member of the limited liability company can act as the registered agent if desired, or a third-party registered agent service like MyCorporation can be used.

Why designate a third party to act as my registered agent?

It should be noted that registered agent information is made publicly available. This can cause privacy concerns for business owners who do not wish to list their personal contact information on the internet for everyone to see. It is also common for the registered agent to become a target of spam or robocalls since this private information is relatively easy to obtain. Another issue that may arise is that in the case of a lawsuit, these documents would be hand delivered directly to the registered agent, and in the case that you used your business location for this purpose, this could occur in front of your customers. This is why many business owners opt for a third-party registered agent service such as MyCorporation to act as a registered agent on behalf of their business.

Another issue that may arise is that in the case of a lawsuit, these documents would be hand delivered directly to the registered agent. In the case that you used your business location for this purpose, this could occur in front of your customers. This is why many business owners opt for a third-party registered agent service such as MyCorporation to act as a registered agent on behalf of their business.

For a full list of registered agents in Delaware, please visit the Delaware Division of Corporations.

Tip: Our Deluxe and Premium formation packages include a full year of registered agent services for your business. We also offer standalone registered agent services which you can add to your business later.

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MyCorporation® takes the guess work out of starting your business. Answer a few simple questions, and our filing experts will take care of the rest.

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In order to form a Delaware LLC, you must complete and file a Certificate of Formation with the Delaware Division of Corporations. This is a brief document that requests only a little bit of information including the LLC's name, name and address of the registered agent, and date of dissolution (if applicable to the LLC). A filing fee of $90 must be included when filing the certificate. The check must be made payable to the Delaware Secretary of State, too.

What information should be included in the Articles of Organization?

As noted above, information required in the Certificate of Formation covers basic information as it pertains to the Delaware LLC.

If you plan to open a business bank account, you may be required to have a certificate of good standing for account for your Delaware LLC's legitimacy. A Certificate of Good Standing may be obtained through two methods. There are Short Term certificates available at $50 per certificate and Long Form certificates for $175 each, depending on the needs of your Delaware LLC.

After formation, the state of Delaware requires an LLC to create an operating agreement. This agreement needs to be written, and should be kept with the company's records.

What kind of information needs to be included in a Delaware operating agreement?

Operating agreements are required in Delaware and are important to laying the foundation of a properly run business. An operating agreement sets guidelines for the way your business operates now and into the future. Common details in an operating agreement include the following:

  • Basic contact details: The name of the LLC, the address of the principal business location and often, the registered agent address.
  • The business purpose: This is a basic one sentence description of what kind of business your LLC will do, and is often a very general description, which creates a bit more flexibility as the business matures.
  • Tax structure: Often this indicates the way the LLC will choose to be taxed. The main options are to be taxed as a sole proprietor or a partnership ( both pass through options ) or to be taxed as a corporation ( which requires an S Corp Election to be filed )
  • Ownership and management: This section lays out the general rules about how the business will operate day to day. This refers to step 3, where you determined whether your business would be "manager managed" or "member managed". As mentioned before, member managed is the default and the most common choice. If you are unsure, member managed is a pretty safe bet.
Tip: All of our formation packages include a sample operating agreement you can use directly, or modify to fit your needs. Start Now

In Delaware, nearly all industries require registering and licensing your business. Begin your business license registration at Delaware One Stop. This is a licensing portal for businesses, including LLCs, that operate in the state of Delaware. With the help of Delaware one stop, your Delaware LLC may take care of the following items.

  • Learning about the information necessary to start a business in Delaware.
  • Register and license your business in Delaware.
  • Add, renew, change, or close licenses for a Delaware registered business.
  • Hire employees in Delaware.
  • Register out-of-state businesses as a Delaware withholding agent.

Keep in mind that annual fees for Delaware business licenses do vary. However, you may expect to pay $75 for the first location. Separate licenses must be obtained for separate business activities. Check in with your local and county offices to see whether or not you'll need additional licenses, too.

Ready to Get Started?

MyCorporation® takes the guess work out of starting your business. Answer a few simple questions, and our filing experts will take care of the rest.

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An EIN (also called a Federal Tax Id) is a nine-digit number that is issued by the IRS and used to uniquely identify your business for tax purposes. Think of it as a Social Security Number (SSN) for your business, except an EIN is far less sensitive. It is important to wait until the LLC has been approved by the state before applying, and for that reason, filing for an EIN is one of the last things to do when you are setting up a business.

Like a social security number, the EIN allows you to:

  • Open business checking, savings, or investment accounts
  • File taxes for the business
  • Complete payroll for employees if applicable
  • Obtain lines of credit and credit cards, as well as "build credit" for your business
  • Apply for applicable business licenses when required.

You only need a few pieces of information to file including your mailing address and legal business name. You can apply online with the IRS by downloading IRS Form SS-4, or work alongside a third party organization like MyCorporation to complete an EIN application.

You must obtain an EIN when you file your legal entity with the Delaware Division of Corporations.

limited liability company Formation Packages

Save money and simplify the process of starting your business by bundling the services you need with our business formation packages.

BASICS
$99
  • Articles of Organization
  • Name Availability Search
  • Minutes & Membership Certificates
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STANDARD
$124
  • Articles of Organization
  • Name Availability Search
  • Minutes & Membership Certificates
  • Annual Report service
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DELUXE
$224
  • Articles of Organization
  • Name Availability Search
  • Minutes & Membership Certificates
  • Annual Report service
  • Registered Agent services
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Frequently asked questions

In Delaware, if your profession requires state licensing, you would incorporate your business as a Professional Service Limited Liability Company (PLLC). This often includes doctors, lawyers, therapists, and other professions where state licensure is required.

A PLLC is different than a Professional Corporation (PC), which consists of shareholders that own company stock and has different tax implications. Delaware allows licensed professionals the opportunity to form both a PLLC and PC, if desired. PLLCs are usually more popular, as they require less effort to build and operate.

Generally, this can include the following professions:

  • Accounting
  • Acupuncture
  • Architecture
  • Chiropractic
  • Clinical social work
  • Dentistry
  • Law
  • Marriage, family, and child counseling
  • Medicine
  • Speech-language pathology and audiology
  • Nursing
  • Optometry
  • Osteopathy
  • Pharmacy
  • Physical therapy
  • Physician assistants
  • Podiatry
  • Psychology
  • Shorthand court reporters

According to the Delaware Division of Corporations, LLC filing documents may be completed through standard filing and or expedited filing. Expedited filing for a Delaware LLC takes a few days off the total wait time, which, if filed by mail, may take up to 7-10 business days to file.

Delaware LLCs, both domestic and foreign, are not required to file an annual report. However, as mentioned earlier, a Delaware LLC must pay an annual tax of $300. This tax is due on or before June 1st for the prior year. Penalty fees for not paying the required annual tax on time are $200 with an additional 1.5% interest per month.

Businesses organized in other states can foreign qualify to conduct business in Delaware. The Delaware Division of Corporations requires foreign LLCs to file a Certificate of Registration. You must also pay a $200 registration fee with your application.

The Delaware Division of Corporations has a Corporate Fee Schedule. It lists out the costs for state filing fees for each entity type. For a Delaware LLC, the state filing fee for a domestic formation is $90. Same day filing fees are priced at $100. It is advised that you check in with this fee schedule often, as the last revision was on August 1, 2019.