How to Start an LLC in Delaware: A Step-by-Step Guide

Steps to Form a Delaware LLC

1. Name Your Delaware LLC

Choosing the right name is the first step:

• Ensure Availability: Check that your chosen name isn’t already taken by another business. Use Delaware’s Division of Corporations’ online tool to verify availability.
• Add LLC: Your business name must include “Limited Liability Company,” “LLC,” or “L.L.C.”
• Domain Name: Don’t forget to check if the web domain is available! Having an online presence from day one is crucial.

2. Appoint a Registered Agent

Delaware requires every LLC to have a registered agent. This is a person or company that receives legal documents on behalf of your business.

• Who Can Be an Agent?: Your agent must be a Delaware resident or an authorized business entity with a physical address in the state.
• Why You Need One: It ensures that you won’t miss any important legal notices. Consider hiring a professional service like Stellar to handle this for you—you’ll never have to worry about being unavailable during business hours.

3. File the Certificate of Formation

This is the official document that makes your LLC a legal entity. You can file it online or by mail with the Delaware Division of Corporations.

• Fee: The filing fee starts from $110 (additional fees for same-day service and more). Want a fast and hassle-free filing? Stellar offers formation services that take care of everything for you.
• Details Needed: You’ll need your LLC’s name, the registered agent’s information, and the name of the person filing the document.

4. Draft an Operating Agreement

While not required, an operating agreement is a smart move. It sets the rules for how your Delaware LLC will be run.

• Why It Matters: This document defines the roles of members, how profits are distributed, and how disputes are settled. Even if you’re a single-member LLC, it helps avoid future confusion.

5. Get an EIN (Employer Identification Number)

Every LLC needs an EIN for tax purposes. It’s like a Social Security Number, but for your business.

• How to Apply: You can easily apply for an EIN through the IRS website or let Stellar handle it for you.
• Why You Need It: It’s required for opening a business bank account, hiring employees, and filing taxes.

6. Register with the Delaware Division of Revenue

If your LLC will be doing business in Delaware, you’ll need to register with the state’s Division of Revenue to obtain a business license.

• Business License: Delaware LLCs conducting business within the state must pay a small fee to get their business license.
• Additional Requirements: Depending on your business type, you may also need to comply with workers' compensation, unemployment insurance, and new hire reporting.

Why Form a Delaware LLC?

Here’s why Delaware is often considered the best state to form an LLC:

• Favorable Tax Structure: Delaware has no sales tax, and for LLCs not operating within the state, income tax exemptions apply.
• Asset Protection: A Delaware LLC shields your personal assets from business liabilities, keeping your home, savings, and other personal property safe.
• Business-Friendly Court System: The Court of Chancery efficiently handles business disputes, so your legal issues are resolved quickly.
• Simplicity & Flexibility: Delaware LLCs require less paperwork and don’t need to hold annual shareholder meetings or file annual reports, just a simple $300 annual franchise tax.

Conclusion

Forming a Delaware LLC is a strategic choice that offers benefits like tax advantages, legal protections, and simple management. With Stellar, the process is easier and faster, so you can focus on building your business.

Ready to get started? Stellar has your back from the first step of LLC formation to compliance. Let’s simplify it for you.

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Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. Seek the counsel of a licensed professional for specific questions related to these topics.