Follow our free guide to form an LLC in Delaware
Why is setting up an LLC in Delaware a unique process? Read our two-phased comprehensive guide that has everything you need to know about forming a Delaware LLC.
When you have help, Delaware LLC formation is very straightforward and easy, no matter how difficult it may appear.
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Choosing a name for your new business is an important first step in forming a Delaware LLC. As you narrow down the list of possible company names, there are a few guidelines the state and federal government have set concerning business names.
Tip: Use a free business name search tool to ensure your company’s desired name is available.
The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C
Your business name cannot be intentionally misleading to consumers
The name of your new LLC must not be similar to another organization’s name/trademark
Depending on the state that you form your LLC in, a few restrictions may apply.
A few examples include:
“Lottery” and “Bank” are ineligible for use (any state)
Terms that represent educational or Veterans’ organizations are restricted
Terms related to the Armed Forces or civil servants (police, EMT, fire)
LLC business names associated with government and/or financial entities are not always restricted - it depends on the state. Additional paperwork may be required.
Due to the growing importance of technology in the current culture, creating an online presence is important for a successful business. Check if your domain name is available at a number of online web hosting sites.
The owners of an LLC are known as members and managers. All LLCs will have members, but not every LLC will have managers. The difference in title depends on the management structure of the business.
Member-managed: Ownership is divided among members of the LLC, and all parties receive profits according to an agreement (distribution of responsibilities, share of liability, etc.)
Manager-managed: One person is appointed as the main operator, and other LLC members such as investors are not actively involved in day-to-day operations.
Required Number of Members Delaware LLCs must have at least one member or manager in order to form a business.
Member Disclosure Requirements An organizer/authorized representative may sign and file the Certificate of Formation in place of the LLC members.
Age Restrictions LLC members in Delaware may be of any age.
Residence Restrictions There are no residency restrictions imposed on LLC members in Delaware.
A registered agent is necessary when setting up an LLC in Delaware. Your business cannot be official without them.
A registered agent is a third-party who is responsible for handling service of process notices, communication with the Secretary of State, and other official government documents.
Whenever you start an LLC in Delaware, the law requires a person to consistently be available to receive government documents.
The registered agent must have a physical address — not a P.O. Box
The registered agent must be available during business hours
The requirements to be a registered agent are as follows:
A resident with a physical address in Delaware
An LLC or corporation that is licensed to conduct business in Delaware
The name and contact information of the LLC’s registered agent is a matter of public record.
You are legally allowed to be your own registered agent as long as you have a physical address in Delaware.
Since the registered agent’s name and address are publicly listed, LLC business owners who choose to be their own registered agent risk compromising their personal information.
Tip: Avoid any hassles and choose Swyft Filings' registered agent services to fill the registered agent needs for small businesses in Delaware. LEARN MORE
One of the most important steps involved in legally forming an LLC in Delaware is filing the Certificate of Formation with the Secretary of State.
The Articles of Organization is a legally binding foundational document that is filed with the state government to officially form an LLC.
Without the Articles of Organization, your LLC in Delaware will not be legally recognized by the Secretary of State.
The filing fee for Delaware is $90. The filing fee for a foreign LLC is $200.
The name and address of the LLC
The name of the organizer filing the paperwork
The name and location of the registered agent
The chosen LLC management structure
The duration of the LLC (perpetual or not)
If you plan to live and operate your business in another state, you can still form your LLC in Delaware, but you must register as a Foreign LLC.
A foreign LLC is any business that is “housed” in one state and incorporated in another. You can found and build a flower shop in Texas while your LLC is technically formed in Delaware.
Even though the state government allows (and even welcomes) this, it adds to the formation process with more paperwork and more expense.
Important Points to Consider:
You must also form an LLC in the state where your business will operate
You are still subject to the requirements (fees and taxes) of both states
Please Note: Conducting business in Delaware without filing as a Foreign LLC can result in a $200 fine.
The LLC Operating Agreement, although not necessary for LLC filing, is a great way to organize leadership and have something to refer to.
The LLC Operating Agreement is a legal document that outlines the rights and responsibilities of all the people involved in the business and lists the operational procedure of the business.
In times of dispute or instability, the LLC Operating Agreement settles disagreements because it clearly defines the roles in the company. The LLC Operating Agreement often prevents agreements from happening because the concerns are already addressed.
The LLC Operating Agreement is for the benefit of your LLC and remains in-house and does not need to be filed with the state.
While there is not a set rule of what must be included in your LLC operating Agreement, most documents include the following the information:
List of the members/managers and their roles
Designation of authority in the LLC
Initial capital contributions of the members
Voting designations and percentages of the members
Member transfer/addition rules and restrictions
Distribution of profits
Meeting schedule
Tip: Get a customized LLC operating agreement for your small business with Swyft Filings. Add structure to your LLC. LEARN MORE
The state of Delaware requires an EIN for any business that has/will have employees. Without an EIN, your Delaware LLC will not be able to conduct business.
This nine-digit number is assigned to your business by the Internal Revenue Service (IRS) and helps the government identify your business just like a personal Social Security number.
EIN is an acronym for Employer Identification Number. It is also known as a Federal Tax ID.
Federal law dictates that certain types of business entities register for an EIN:
Any business with employees (even if owned by one person)
Any business with more than one member
A partnership (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.
The more common reasons you would need an EIN are:
To hire employees
To open a bank account in the U.S.
To file your company’s taxes
To pay independent contractors
In short, if you make money through your business and it has employees, you must have an EIN.
The EIN for your LLC will be part of public record.
If you are a sole proprietorship who wants an EIN for your business, you can elect to use your social security number; however, your EIN is part of public record.
Swyft Filings offers EIN/tax ID services for small businesses in Delaware. LEARN MORE
With your Delaware LLC registration complete, the next part of the process will further establish your LLC with the state and get you ready to do business.
The next phase of your LLC:
You must pay an annual Alternative Entity Tax if you form a Delaware LLC. The details are listed below:
Fee: $300 Due Date: June 1 Late Fees: $200 late fine plus 1.5% interest per month
Delaware’s state income tax rates are listed in the table below:
You can also choose to have your LLC taxed as a corporation; if so, you will be responsible for paying corporate taxes on your business’s earnings
Corporations in Delaware are required to pay two types of taxes:
Corporation Income Tax (8.7%)
Franchise Tax
The Delaware franchise tax is determined in two ways:
Authorized Shares (determined by the number of shares)
Assumed Capital Value (determined by the amount of no-par capital)
Other taxes your LLC may need to pay:
Gross Receipts Tax (from 0.1037% to 2.0736%)
Employee Withholding Tax
Unemployment Tax
The licenses and permits required when starting an LLC in Delaware can vary depending on a number of factors:
Location (city and county)
Type of Business
Industry
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to our business license research package page. LEARN MORE
Your Delaware LLC is officially ready for business, but there is still one last step — the Certificate of Good Standing.
Since many financial institutions and businesses require proof that your new business is fully compliant with the state, obtaining a Certificate of Good Standing provides your LLC with a “seal of approval” from the Secretary of State.
The Certificate of Good Standing is an official notification from the government agency that confirms your entity has been properly filed and is still in compliance.
The Certificate of Good Standing is generally issued by the Secretary of State.
A Certificate of Good Standing can be requested after your LLC has been officially formed through the Secretary of State.
In the course of conducting business, there will be times when you will need to prove that your business is properly filed and fully compliant with the state. Many banks and businesses will request a Certificate of Good Standing as part of the due diligence process (especially during major transactions).
The Certificate of Good Standing does not expire/does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Delaware LLC. LEARN MORE
The process you must take to register an LLC in Delaware might seem daunting at a glance. With our help, however, your Delaware LLC can be formed painlessly as we help you:
Name Your Delaware LLC
Establish Ownership
Find a Registered Agent in Delaware
File the Articles of Organization
Create an LLC Operating Agreement
Obtain an EIN/Tax ID
Register for Delaware State Taxes
Apply for Business Licenses and Permits
Request a Certificate of Good Standing
Our Delaware LLC formation experts can help ensure you have all the Delaware LLC filing requirements needed:
A Delaware LLC Name
Proof of Ownership
A Registered Agent
The Certificate of Formation
The LLC Operating Agreement
An EIN/Tax ID
Delaware State Tax Registration
Any Applicable Business Licenses and Permits
A Certificate of Good Standing
Delaware is one of a few states in the nation that does not charge sales tax. Sales on cigarettes, alcohol, and gasoline are still taxed; however, the tax rate for these items is among the lowest in the U.S.
Delaware does not require full disclosure of an LLC’s members in the incorporation paperwork. The business may select an organizer who is neither a member or manager to be listed on the paperwork that is filed with the Secretary of State.
Delaware does not require LLCs to file an annual report. This particular requirement, however, is still in place for corporations and non-profit organizations.
For business owners who choose to form an LLC in Delaware while living/operating in another state, the requirements and overall process can be complicated and expensive, starting with a mandatory $200 filing fee for Foreign Qualifications.
Delaware’s favorable corporate/tax laws make it a popular home for many major corporations — 50% of publicly traded corporations and 60% of Fortune 500 companies in the U.S. But most of those laws are in place to service and protect bigger corporations; smaller companies, especially those not physically located in Delaware, may not see much the same benefits.
$90 filing fee/ $200 foreign filing fee
$300 Alternative Entity Tax
No annual report due
Setting up an LLC in Delaware typically takes three weeks. There are options for next day expedited processing, but those will cost extra, usually between $50-$100.
When you set up an LLC in Delaware, you're looking at a unique location that offers specific advantages and challenges to your business. Though most of its laws favor big businesses, the attractiveness of their lack of state sales tax, privacy, and other advantages can't be overstated. The ultimate decision as a business owner will be up to you, but you can rest assured that when it comes to creating an LLC in Delaware, our Business Specialists will have your back.
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Every day, business owners from all over the nation rely on Swyft Filings to help them file an LLC online and maintain their company.
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Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
No matter the business type, Swyft Filings can help you form your new company.
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