How to File an LLC in Delaware

You are finally doing it! Your small business is taking shape, and now you’re the boss. The problem is that your entrepreneurial dreams have also brought along some unexpected responsibilities and paperwork. And, as the head honcho, you’ll need to act fast to ensure your growing operation gets built on solid ground. 

While many things will require due diligence at this stage in the game, none are more important than deciding how and where you will incorporate your business. Choosing what type of business you will operate as and which state to incorporate in will have long-lasting and far-reaching effects on your organization’s financial and legal future.

Near the top of the list of popular states to form a small business is Delaware. Delaware is home to more than 1.8 million business entities, including more than 66% of all Fortune 500 companies, thanks to a corporate-friendly legal system and tax laws.[1] 

If you are considering a Delaware LLC, then keep reading. Before incorporating your LLC, S Corp, or C corp in Delaware, we are breaking down everything you need to know. 

Key Takeaways:

• Thanks to a corporate-friendly legal system and tax laws, Delaware is home to more than 1.8 million business entities, including more than 66% of all Fortune 500 companies.[1]

• LLCs protect business owners from any personal liability in case of a lawsuit, open up new avenues of tax benefits, and don’t require complicated paperwork to get started. 

• Delaware is home to more businesses than people. You don’t need to live or even do business in Delaware to form your LLC there. 

What Is LLC Formation?

When starting a small business, you can form a business entity to operate under. As an independent contractor, this business entity is your given name. You don’t need to file additional paperwork with the Secretary of State to operate under your own name, but you have several options if you want to do business under a different one. 

While the most straightforward option may be to file a DBA (Doing Business As) with the state, it will not protect your personal assets in the event of a lawsuit, nor will it open up additional benefits for tax purposes. For this reason, many first-time and even seasoned entrepreneurs elect to incorporate as an S corp, C corp, or LLC, each carrying different fees and annual filing requirements.

An LLC is typically the preferred business entity for small and first-time business owners. That’s because an LLC offers business owners protections from any personal liability in case of a lawsuit, opens up new avenues of tax benefits, and does not require complicated paperwork to get started. 

In the United States, LLCs get formed at the state level, and businesses must choose which state to incorporate in. Below, we will outline the LLC formation requirements for Delaware.

Step-By-Step Guide to Starting Your Delaware LLC

Believe it or not, Delaware is home to more businesses than people. You don’t need to live or even do business in Delaware to form your LLC in the state. And, because Delaware has made its courts and tax laws more favorable for corporations, thousands of new businesses choose to create their LLCs there.

If you have been wondering how to join the millions of businesses that call Delaware home, we can help. Below, we break down the step-by-step guide on everything you need to form your LLC in Delaware and start reaping the rewards, tax benefits, protections, and other advantages of creating your LLC. 

Step 1: Choose a Business Name for Your Delaware LLC

To register your LLC in Delaware, you must pick a name for your new business. This name must be unique, so perform a name search to check if the business name is already taken. We offer a free business name search to help you get started, or you can check the state’s database online. 

You can reserve your desired name with the state of Delaware for a $75 fee, which will hold the name for 120 days. While not required to file, it will ensure your name remains yours until the paperwork gets completed; otherwise, you may risk the name being taken.

Delaware LLC Name Restrictions & Rules

When selecting a name, remember that the state of Delaware has some restrictions on what name you can choose.

• Your name must be unique

• Your name can’t contain the words “bank,” “trust,” “university,” or “college”

• Your name can’t be vulgar

• Your name must include “Limited Liability Company,” “L.L.C.,” or “LLC” at the end

Trademarks & Domain Registrations

Registering your new business name with the state of Delaware is only one step to protecting your business. In this digital age, you should also register a domain address online with your new business’s name. Likewise, consider registering a trademark to ensure others cannot do business under your new name.

Step 2: Fill Out the Delaware Certificate of Formation

Once you have your name picked out and have verified that it is not already in use, you can start to fill out the Delaware certificate of formation. Remember that filling out and submitting this form will incur some responsibilities and fees. This includes filing fees and, in some cases, an annual franchise tax and other one-time and annual state fees for which you will be responsible as the LLC owner. 

To complete and file your form, you will have three options available. You can file online, by mail, or use our LLC formation service to handle the paperwork for you. In all cases, your certificate of formation is required to remain on file with the Delaware Secretary of State and will need to contain the following information:

• Your LLC’s name

• The name and address of your registered agent 

• Your name and signature

While additional information can be included, such as your LLC members’ names and titles, it may be best to keep your filing minimal.

Submitting Online

You can find the Certificate of Formation online here. After downloading the form, you can fill in the required fields and upload it using the Document Upload Service on the Delaware State portal. There is a $90 filing fee when submitting your form online.[2, 3]

Submitting by Mail

You can also submit your certificate of formation by mail. You can use the same digital PDF here. Be sure to print two copies after you have completed the forms, one to keep and one to mail. You can include a copy of your name reservation when mailing your form.[2]

You can send completed forms to the Delaware Division of Corporations:

401 Federal St. Suite 4 Dover, DE, 19901

There is a $90 filing fee when mailing your form.

Step 3: Hire a Delaware Registered Agent

While you and other members of your LLC are not required to maintain a residence or an office in the state of Delaware, you will need to have a registered agent on file with the state. A registered agent service will be available on your behalf to receive any required communications from the Secretary of State’s office in Delaware. 

Your Delaware registered agent needs to have an office located in Delaware with a Delaware street address and will need to be open and available during regular business hours to accept formal correspondence, legal documents, and other notices from the state. If you live in and maintain an office in Delaware, this agent can be yourself, or you can use a registered agent service.

If you use a registered agent, ensure it is a person or company you trust. This individual will also be responsible for receiving your business’s tax notices and other legal documents that could impact your LLC if not adequately received and communicated to LLC members. 

Step 4: Create an LLC Operating Agreement

While an operating agreement is not required to form your LLC in Delaware, having one is still a good idea. An LLC operating agreement is essentially a way for the members of the LLC to document how the business will run. It can outline rules, regulations, and other provisions and may be written, oral, or implied. 

However, a written operating agreement is often considered the best practice for an LLC and can help you avoid any ambiguity for LLC members in the future. We can help you draft, print, and file your LLC operating agreement online if you are still deciding what to include in yours.  

Step 5: File for an Employer Identification Number

While you are not required to obtain an EIN for your LLC before filing with the state of Delaware, it will make doing business much more manageable. Most banks need an LLC to have an EIN before opening a business account or credit card. 

LLCs can apply for EIN with the IRS online, by mail, or by fax. The IRS has the required form and details on its website.[4] When applying for the EIN, keep in mind that you will need to meet the following requirements:

• Your LLC must be located in the United States

• The business owner or individual applying must have a social security number or EIN 

If you want to skip the hassle, we can obtain your EIN for you for a small fee.

Let Us Handle Your LLC Paperwork

The path of entrepreneurship is not easy, but it’s worth it. Starting your own business will require you to spend countless hours and learn many new skills to make it work. 

At Swyft Filings, we understand the demands of the small business owner because that is how we started, too. Our services are carefully curated to help free up time and allow entrepreneurs like you to focus more on the things that matter most.

Since 2005, we have helped more than 300,000 small businesses get their start by registering their LLCs online. If you want to form your LLC in Delaware in just 10 minutes or less, then we can help. Our fast and affordable services will take the guesswork out of filing and allow you to complete everything 100% online. To get started, visit our LLC incorporation page, select Delaware for your location, and you’ll be minutes away from the finish line. Try it now. 

FAQs

How much does setting up an LLC in Delaware cost to set up?

Filing your certificate of formation in Delaware will require a $90 fee. However, there are other costs to consider when choosing to form and operate your LLC in Delaware, including:

• $200 filing fee for foreign LLCs

• $75 filing fee to reserve a business name 

• $50 fee for a certified copy of the certificate of formation

• $50-100 for optional expedited services

• $25 fee for a DBA per county to operate 

• $50 minimum fee is required for a business license if your LLC will be conducting business in the state

• $300 annual state tax

• $200 filing fee for foreign LLCs

• $50 for a certified copy of your filed certificate of formation

• $50-100 for expedited services

• $100-300 annual registered agent fees

How is an LLC taxed in Delaware?

LLCs in Delaware are not required to file a tax return or pay state taxes based on income. However, every LLC must pay an annual state tax of $300. This tax is due every year before June 1 and carries a late penalty of $200.

What are the benefits of a Delaware LLC?

There are numerous benefits to forming your LLC in Delaware instead of another state. A few of the motivating factors include:

• Better personal asset protections

• Statutory limitations personal liability

• Simple filing requirements and paperwork

• Low annual fees and taxes

• Improved privacy for LLC members

• Fewer organization requirements

• Favorable corporate laws and taxes

How do you dissolve an LLC in Delaware?

The process to dissolve or cancel an LLC in Delaware is similar to the process of forming your LLC. Paperwork must be completed and submitted to the state for approval. You can find all details by visiting the Division of Corporations website here.[5] 

Bibliography:

1. Delaware Division of Corporations. “Annual Report Statistics.” Accessed January 5, 2023

2. Delaware Division of Corporations. “Certificate of Formation of a Limited Liability Company.” Accessed January 5, 2023

3. Delaware Division of Corporations. “eCorp Business Services.” Accessed January 5, 2023

4. Internal Revenue Service.“Apply for an Employer Identification Number (EIN) Online.” Accessed January 5, 2023

5. Delaware Division of Corporations. “Dissolutions and Cancellations.” Accessed January 5, 2023