How to Start a Delaware LLC
Delaware LLC Formation – Basics & Helpful Information
This article is meant to be a general overview of the Delaware LLC formation process; including information about how to start a Delaware LLC and other basic issues related to Delaware LLCs.
Initial Filing Fees
Delaware LLC Filing Fees
The Delaware filing fee for a domestic LLC Certificate of Formation is $90. Delaware has 4 levels of expedited service:
- 1 Hour = $1,000
- 2 Hour = $500
- Same Day = $100
- 24 Hour = $50
Delaware LLC Filing Time
If the Certificate of Formation is received by the state of Delaware office in proper form and all required fees are paid when received, regular work takes on average between 10-15 business days to process. Due to large amounts of work received in March, June, and December, processing time can be 3-4 weeks. You can pay extra to have the Certificate of Formation processed faster (see expediting fees above).
Annual Compliance & Fees
Delaware LLC Annual Compliance Requirements
LLCs formed in the State of Delaware do not have to file an annual report. Delaware LLCs are, however, required to pay a flat annual tax of $300 no later than June 1st of each year. Failure to pay the annual tax timely will result in a late fee of $200.00 (+ interest at 1.5% per month thereafter).
Form an LLC in Delaware
You can use this checklist to help guide you through the process of forming a Delaware LLC:
Step 1: Decide on a Business Name
One of the first things a business owner does is select a name. If you are going to create an LLC in Delaware, you will need to make sure the name is available. We recommend a free search via the Delaware SOS first. This search will only determine the existence of other Delaware business entities or foreign business entities that have filed as foreign business entities in the state of Delaware.
It is also highly recommended that you check the US Patent and Trademark Office to see if someone has a federal trademark of the business name you want (the Delaware SOS will not check other state’s databases or the federal trademark database). You can purchase comprehensive name availability search to get a professional to determine if the desired name is available.
In Delaware, no person, firm, association, or company can transact business without using their actual legal name within the State unless you file a Fictitious Name Certificate in the office of the Prothonotary of each county where it is transacting business.
Step 2: Register your LLC with the State
Delaware Certificate of Formation
The Certificate of Formation is what actually creates an LLC in Delaware. As such, a Certificate of Formation will need to be prepared and filed with the Delaware Secretary of State (SOS). The Delaware SOS has a Certificate of Formation you can use if you want to form an LLC in Delaware yourself. The filing fee is due at the time you file the Certificate of Formation with the Delaware SOS.
The Delaware Certificate of Formation must include (at a minimum):
- Name of LLC
- Name & address of Registered Agent
- Signature of Authorized Person
- Date of Signature
Please note: A cover sheet with your name or entity name, return address and phone number is required. You may download a PDF fillable cover sheet. You may also contact the DE SOS at (302) 739-3073 with any questions or help needed in order to complete your forms. The signed Certificate of Formation along with the Cover Sheet must be mailed or faxed to the DE SOS (the mailing address and fax number can be found at the bottom of this page).
Delaware Registered Agent Info
Delaware requires a registered agent to be either an individual resident or business entity authorized to do business in the State of Delaware. The registered agent must have a physical street address in Delaware. If the business is physically located in Delaware, then the business may act as its own registered agent. You may view a list of professional Delaware Registered Agents. If the registered agent is other than the entity itself, please contact the selected Registered Agent used in your entity formation and inform them of your intentions.What is a Registered Agent? →
Step 3: Create and Sign the LLC’s Governing Document
The governing document for an LLC is called the “company agreement” or sometimes the “operating agreement”. The company agreement is to an LLC like a partnership agreement is to a partnership (or bylaws to a corporation). The company agreement governs the internal operation of the LLC and is typically a private document that is kept in the company book and the principal place of business (it is NOT filed with the state). The company agreement can address many issues, some of the more common concepts found within a company agreement are:
- Limitations on the members liabilities
- The level of consent needed to take various actions (i.e. simple majority required to add new members)
- The percentage of the LLC that each member owns
- How profits and losses are allocated between the members (typically based on ownership percentages)
- Limitations on transferability
- What each member is contributing to the LLC and what happens is such contributions are not made.
- The authority of the members, officers, managers, committees, etc.
- How meeting are conducted
One of the reasons we recommend using an LLC formation company like IncFile is that they can provide you with a company agreement in connection with their LLC formation services.
Step 4: Get an EIN
After you form an LLC in Delaware, you can get an EIN (don’t make the mistake of getting the EIN before the SOS confirms the LLC filing.
There are a few different ways to get an EIN:
- Apply Online Yourself: The IRS has an online EIN Application you can use to get an EIN. The turn around time on the EIN using this method is only a few minutes.
- Use Form SS-4: You can get an EIN the old fashion way by completing Form SS-4 and mailing or faxing into the IRS. How long does it take to get the EIN this way? According to the IRS: if you mail in Form SS-4, it will take 4-5 weeks to get your EIN. If you fax in Form SS-4 you should have the EIN back in a week if you provide a fax number or 2 weeks if you don’t have a fax number.
- Have a Third-Party Obtain: All of the LLC formation companies have the ability to get the EIN for you. The EIN obtainment charge varies by company, but it is generally between $50 and $100. If you get one of the higher priced packages, they will sometimes throw in the EIN for free.
Step 5: Obtain Required Licenses and Permits
After you create your new LLC, you’ll need to determine if your business/profession requires a license or permit to conduct business. There are numerous potential permits and licenses your business could require.Learn more about Delaware Business Licenses and Permits →
Registering a Foreign LLC in Delaware
If you have a non-Delaware LLC (aka Foreign LLC) and you are doing business in Delaware, you may need to register the Foreign LLC in Delaware. Each state has a different definition of “doing business”. In Delaware, the kinds of activities that would not constitute “doing business” are outlined in the Delaware Code, Title 6, Section 18-912.
The filing fee for the Certificate of Registration of Foreign LLC in Delaware is $200, plus an additional $50 for a certified copy of the Certificate of Existence.