To start an LLC in Delaware, you must file a Certificate of Formation with the Delaware Division of Corporations. You can file the document by mail or online. The Certificate of Formation costs $90 to file. Once filed with the state, this document formally creates your Delaware LLC. However, to actually ready the LLC to do business, you must complete several additional steps.
Everything You Need to Know About Delaware LLCs:
Delaware LLC Formation Options
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How to Start an LLC in Delaware
To start an LLC in Delaware, you’ll need to do three things: appoint a registered agent, choose a name for your business, and file a Certificate of Formation with the Division of Corporations. You can file the document online or by mail. The certificate costs $90 to file. Once filed with the state, this document formally creates your Delaware LLC.
According to DE Code § 18-104, every Delaware LLC must appoint and maintain a registered agent. You don’t need to hire a registered agent, but if you do, make sure your registered agent will list their address on your certificate wherever possible to ensure maximum privacy.
If you’re starting a new business, you probably already know what you want to name your LLC. But you’ll need to know if your preferred name is available. To find out, visit Delaware Division of Corporations Name Search and search until you find the perfect name for your LLC.
Once you know who your registered agent will be and what your LLC name is, you’re ready to file your Delaware Certificate of Formation. Follow along with our filing instructions below:
Filing the Delaware LLC Certificate of Formation
Learn more about each Certificate of Formation requirement below. Note that the information you provide becomes part of the public record—permanently.
Or skip the form entirely and hire us to form your Delaware LLC. We provide a free business address to list whenever possible throughout the filing to better keep your personal address private. And the most affordable way to start a business? Pay just $34 out the door with our VIP monthly payment option.
1. LLC Name
You have to include “Limited Liability Company” or an abbreviation like “LLC.” The name cannot be currently in use in the state of Delaware.
2. Registered Office and Registered Agent
The registered office must be located at a physical address in Delaware. This is where your registered agent will be available to accept legal notices on behalf of your LLC. Your Delaware LLC registered agent can be an individual such as yourself, a friend, or another LLC member. Or, it can be a business such as Northwest. When you hire Northwest, our name and address will go here so that you can better maintain privacy.
3. Execution Block
Execution block might sound scary, but all Delaware needs here is the signature of the person authorized to form the LLC, aka the person filing the Certificate of Formation. Underneath the signature line is a place to print the name. Hire us, and our name will go here.
4. Additional Provisions
If you wish to add provisions to your Certificate of Formation, you may do so in supplemental documents, so long as the provisions are allowed in state statutes. For example, a provision might state that the LLC’s formation date should be a future date (maybe sometime in the next tax year?), rather than as soon as the paperwork is processed.
Why Have a Registered Agent Form Your Delaware LLC?
Professionals in Delaware hire registered agent services like Northwest Registered Agent to start an LLC—but why?
Standard filing companies don’t have employees or offices in every state. But as a national registered agent, it’s a requirement for us, which is a benefit for our clients. We own our own building in Dover, DE. We’re on a first name basis with the people who work in the Division of Corporations. We know all the fastest filing methods, which translates to fast, professional service—without extra fees.
As your registered agent, we list our Dover registered office address on your LLC’s formation documents. Why? If you’re starting a business from your apartment in Wilmington, do you really want your apartment address as your business address? (Hint: the answer is no.) We’ll list our address, so you don’t have to list yours. Plus, we never sell your data. We don’t list your personal information on filings if we don’t have to. It’s all standard and part of our commitment to Privacy by Default®.
Free Mail Forwarding, Business Address and More
At Northwest, we do everything a registered agent should do and more. You can list our address as your business address on your state filings. We include limited digital mail forwarding with registered agent service (up to 5 pieces of regular mail per year; $15 a doc after that).
Plan on accepting credit cards? We also offer a Free Credit Card Processing Consultation. Our specialists work with processors to negotiate low rates and better contracts for our clients.
And now, try our in-house Northwest Phone Service for 60 days, free of charge with our formation service. Get a virtual phone number with your choice of area code, make and receive calls from any device, and more—for just $9 a month.
We know the in’s and out’s of each state—and we use this knowledge to help you when you need it most. Our team of Corporate Guides® has over 200 local business experts. You can call or email us for answers to all your questions about your LLC in Delaware. Our Corporate Guides are dedicated solely to helping you with your business—not selling you services or meeting quotas.
What Do I Do After My Delaware LLC Is Formed?
After your Delaware Certificate of Formation is approved, you still have a few more important steps to take, including getting an EIN, drafting an operating agreement, opening a bank account, funding the LLC and learning about state reporting and tax requirements.
Get an EIN
An EIN (“Employer Identification Number”) is a federal tax ID assigned to your business by the IRS. The IRS uses your EIN to easily identify your business on tax filings.
Does a Delaware LLC need an EIN?
Almost always. You’ll need an EIN if you have employees, and you’ll likely use your EIN when you open a business bank account. You’ll also need an EIN to register for a Delaware business license.
How do I get an EIN for my LLC?
You can apply for an EIN directly from the IRS at no cost. Most businesses are able to apply online, but if you don’t have a social security number, you’ll need to apply with a paper form. Want one less thing to do? Add on EIN service when you hire us, and we’ll get your EIN for you. Or choose our VIP service—an EIN is included.
Write an LLC Operating Agreement
Operating agreements put into writing how your business actually operates—how much each member invested, how profits and losses will be allocated, how voting works, and what happens if there’s a dispute or if the whole business (knock on wood) falls apart.
Do I need an operating agreement for a Delaware LLC?
Delaware doesn’t legally require an operating agreement. According to Delaware Code Title 6 § 18-101, a “limited liability company agreement” may be written, oral, or implied. But, the law never states that it is a necessity to have.
That said, an operating agreement is important to have, even if it isn’t legally required. In fact, an operating agreement is one of your LLC’s most important internal documents—creating one can help your LLC with everything from opening a bank account to handling major events from mergers to dissolution. (And please, get it in writing. Too much can get lost in translation with an “implied” agreement.)
What should be in an operating agreement?
An operating agreement should explain how the business will handle “big picture” situations—everything from allocating profits and losses to dissolving the business. Below is a list of common topics that operating agreements should cover.
- Initial investments
- Profits, losses, and distributions
- Voting rights, decision-making powers, and management
- Transfer of membership interest
- Dissolving the business
Your operating agreement can cover pretty much anything as long as it isn’t contrary to Delaware law. You’ll want to make sure your operating agreement is as clear and unequivocal as possible. Delaware Code Title 6 § 18-111 states that any attempt to interpret, apply, or enforce the operating agreement can be brought forward in the Court of Chancery (Delaware’s business-focused court).
How do I write an operating agreement?
To write an operating agreement, you need to address how your business will handle money, members, votes, management, and more. Not sure how to get started? At Northwest, we’re here to help your LLC get off on the right foot. When you hire us, we provide your business with a free LLC operating agreement, specific to your management style. We’ve spent years developing these agreements and other free LLC forms—which have been used by over a million LLCs.
Open an LLC Bank Account
Your LLC needs its own bank account. Why? An LLC gets its limited liability from being a distinct entity, separate from its members. If you mix personal and business finances, you could lose your liability protections.
How do I open a bank account for my Delaware LLC?
To open a bank account for your Delaware LLC, you will need to bring the following with you to the bank:
- A copy of the Delaware LLC Certificate of Formation
- The LLC operating agreement
- The LLC’s EIN
If there are multiple members in the LLC, you may also want to bring an LLC resolution to open a bank account that states that the person going to the bank is authorized by the members to open the account in the name of the LLC. Northwest can help with this as well—LLC bank resolutions are one of the many free legal forms we provide to ensure you can get your LLC started fast.
Fund the LLC
Time to put some money in that new LLC bank account. What money? For starters, your initial contributions to your LLC’s capital. LLC members are owners, and each owner needs to pay for their membership interest to fund the LLC.
What is membership interest?
Membership interest is your percentage of ownership of the LLC. Membership interest is normally proportionate to your investment. So how does this work?
Imagine your LLC has 5 members. 4 members each invest $1,000 in the business. One member invests $6,000. The total contribution of all members is $10,000. The 4 members each own 10% of the business. The moneybags member who shelled out $6,000 owns 60% of the business.
Typically, this also means that the 4 members would each get 10% of any profits, and moneybags would get 60%. Exactly how profits and losses are allocated, however, can be adjusted in the operating agreement as long as changes are in line with IRS requirements and Delaware laws.
File Delaware Reports & Taxes
Delaware LLCs are not required to file annual reports. However, they are subject to state tax filing requirements, including an annual franchise tax.
What is the Delaware Franchise Tax?
The Delaware Franchise Tax is essentially a payment for the privilege of doing business in Delaware.
How much is the Delaware Franchise Tax?
The fee for the Delaware LLC Franchise Tax is $300. As if that fee weren’t steep enough on its own, there’s also the late fee to watch out for. The state fines you a $200 late fee, plus 1.5% interest each month until the fee is paid. If you continue to be delinquent on payments, your LLC may be administratively dissolved.
When is the Delaware Franchise Tax due?
Your Delaware Franchise Tax is due by June 1 each year. The first franchise tax your LLC owes will be due on June 1 the year after your LLC forms. So, if your LLC is formed in May 2021, your first franchise tax would be due by June 1, 2022.
When you sign up for Northwest, we send you reminders for your franchise tax due dates. Want one less thing to worry about? With our business renewal service, we can complete and submit your annual franchise tax report for you for $100 plus the state fee.
Are there Delaware LLC tax benefits?
If you’re thinking about forming an LLC in Delaware, you’re likely aware that business formations are the state’s claim to fame. Part of the reason for this is that Delaware has structured its taxes to be beneficial to businesses formed in Delaware that don’t actually do business in Delaware. That has attracted many national and small businesses alike for the following reasons:
No Taxes On Intangible Property
This means that Delaware doesn’t have an intangible personal property tax on things like patents and trademarks. It makes Delaware an ideal place for LLCs designed to be holding companies.
No State Income Tax
LLCs located in Delaware that don’t do business in Delaware don’t have to pay Delaware’s income tax.
No Sales Tax
Delaware doesn’t put a sales tax on goods or services.
What else should I know about Delaware LLC taxes?
The Delaware personal net income tax rate varies based on income. The rate ranges from 2.2% to 5.55% for income under $60,000. For income over $60,000, the rate is 6.6%.
Delaware is one of the few states without a sales tax at the state or local level. Yay!
Property taxes in Delaware are also worth noting, as they are some of the lowest in the country. The average effective property tax in the state is just 0.56%. So while you’re out looking for the perfect Delaware property, let Northwest push the paperwork for your LLC’s formation. We can form your Delaware LLC for as low as $315. Or, pay just $34 out the door with our VIP monthly payment option.
Do LLCs have to register with the Delaware Division Of Revenue?
Yes. All entities conducting business in Delaware are required to register with the Division of Revenue upon formation. This can be done online at Delaware One Stop or by mailing in the Combined Registration Form.
Delaware LLC FAQs
How can I submit the Delaware LLC Certificate of Formation?
You can file the Delaware Certificate of Formation online or download the form and submit by mail. Mailed filings must be submitted with a cover sheet that includes your name or entity name, return address and phone number, and sent to the following address:
Division of Corporations
John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901
How much does it cost to start a Delaware LLC?
The filing fee for your Delaware LLC Certificate of Formation is $90. Add $50 for 24-hour expediting, or $100 for same-day processing.
Hire Northwest for a one-time fee of $315 ($365 for 1-day expediting), including state filing fees, a year of registered agent service, limited mail forwarding and loads of useful forms and tools to help get your Delaware LLC up and running. Or, pay just $34 out the door with our VIP monthly payment option.
How long does it take to start a Delaware LLC?
Without expediting, it will take an average of 10-15 business days for Delaware to process your Certificate of Formation. During the peak months of March, June, and December, it may take up to a month (or longer, if there is an error or omission in the paperwork) for your certificate to process.
If you hire Northwest to start your LLC, we file online and typically have your expedited Delaware LLC formed within two days.
Does a Delaware LLC need a business license?
All entities that are located in Delaware or conduct business in Delaware are required to obtain a business license form the Delaware Division of Revenue. There is also a fee to register—the amount varies based on your business type. Most fees are around $75 and can be prorated based on how late in the year you apply. Some, however, cannot be prorated and cost significantly more. A circus exhibitor, for example, must pay $750 to obtain their business license.
Cities and counties may have additional licensing requirements, as well. Wilmington requires all businesses operating within the city to obtain a license (and, in most cases, pay a $120+ fee). It’s a similar situation in Dover—all businesses within the city are required to obtain a Dover business license and pay a fee (the fees vary widely and can be prorated based on the month you apply).
Need an EIN or a certified copy of your formation docs for your license applications? Northwest can help. You can easily add on these items to your LLC formation order.
Can a Delaware LLC help me live more privately?
Yes. Delaware is one of the rare states where you can remove all ownership information from public filings. (The same is also true in states like New Mexico and Wyoming.) Check out our page on living privately with an LLC to learn more.
What is a foreign Delaware LLC?
A foreign Delaware LLC is any LLC formed outside of Delaware but registered to do business in the state. For example, if you formed an LLC in Maryland but wanted to conduct business in Delaware as well, you would register as a foreign LLC in Delaware by filing a Certificate of Registration—along with a Certificate of Existence—with the Delaware Division of Corporations. Like domestic LLCs, foreign LLCs in the state have to file (and pay) annual Delaware Franchise Tax Reports. Northwest can register your foreign Delaware LLC for you today!
What can I do if I need Delaware mail forwarding?
Many people form LLCs in Delaware but live elsewhere, making mail forwarding a common concern for business owners. Other business owners simply don’t want personal documents like bank statements arriving at their office for anyone to open. At Northwest, we include limited mail forwarding with our registered agent and formation services. For more robust needs, we also offer unlimited mail forwarding with a unique suite number as part of our premium Delaware mail forwarding service.
How can I get a Delaware phone number for my LLC?
It’s a conundrum: you need a local number to display on your website and give to customers, but you don’t want to make your personal number quite so…public. We get it. And we’ve got you covered with Northwest Phone Service. We can provide you with a virtual phone number in any state—plus unlimited call forwarding and tons of easy-to-use features. You can try Phone Service free for 60 days when you hire us to form your LLC, and maintaining service is just $9 monthly after that. No contract required.
How to Order LLC Formation Service
Our Delaware LLC formation service is designed to be fast and easy—signing up takes just a couple minutes. Here’s how it works:
With Northwest, we give you flexibility on how to pay. You can pay all the fees up front (this includes one full year of registered agent service). Or, pay just $34 out the door with our VIP monthly payment option. With our VIP option, we also include an EIN. Just choose one of the buttons below, answer a few easy questions about your business and submit your payment.
We’ll prepare your Delaware Certificate of Formation and send them to the Division of Corporations for approval. In the meantime, you’ll have immediate access to your online account, where you can find useful state forms, pre-populated with your business information.
Once the Delaware Division of Corporations has approved your filing, we notify you that your Delaware LLC has been legally formed. You can now take any necessary next steps, like getting an EIN and opening a bank account.