How to Form an LLC in Delaware

Pick a name for your LLC

The first step to creating any new business is picking a name that isn’t being used. Be sure to make the name recognizable so it stands out against competitors. Delaware requires all LLCs to include the words “Limited Liability Company” or a similar abbreviation in the name. You can also reserve this name for up to 120 days for a small fee of $75.

You can use Delaware’s Business License Search website to search for business names currently in use.

Appoint your registered agent

All LLCs in Delaware are required to have an appointed registered agent. This person will receive and inform the business owner about any vital company documents. Registered agents can be anyone with a physical address in Delaware available during regular business hours.

It’s possible to choose yourself or a friend as your registered agent. Most companies hire a professional or company to serve as their registered agent for legal safety.

File your Certificate of Formation

Filing the Certificate of Formation is necessary for the creation of your LLC. This document provides the government information about your LLC’s name, address, and registered agent information. After reviewing and accepting the documents, the Delaware Division of Corporations will officially form your LLC.

As of 2024, filing the Certificate of Formation costs $110.

Apply for your Employer Identification Number (EIN)

LLC owners can receive their Employer Identification Number from the IRS. This number is a requirement when completing employee payroll, filing taxes, hiring employees, and opening business bank accounts.

Get business licenses and permits

LLCs may need to obtain specific licenses depending on their industry. For example, livestock farmers must have a Meat, Poultry, and Egg Inspection License to ensure their products are safe for consumption.

Don’t risk legal trouble due to not having the proper business licensing. For more information on industry business license requirements, visit Delaware’s Official Business Licensing Checklist.

Register for state taxes

While LLCs are often considered “pass-through” entities and don’t pay federal income tax at the corporate level, they must still register for state taxes. This registration allows them to pay other taxes, such as state income tax and employer taxes.

Unlike other incorporated business entities, LLCs, Limited Partnerships, and General Partnerships don’t need to file an annual report. They must instead pay an annual $300 franchise tax before June 1st.

• Tax benefits: LLCs can avoid double taxation by passing their losses and profits to their members. The members will only pay taxes on their share of these losses and gains.
• Limited liability protection: Incorporating an LLC separates and protects a business owner’s assets from business-related liabilities and debts.
• Privacy: Unlike LLCs in many states, LLC members in Delaware are not required to disclose their names in formation documents.

• Professionalism and trust: Incorporating your business can give you more access to investors, new members, and customers. Because incorporated businesses are government-recognized, the public sees them as more trustworthy. Many people are more likely to invest in credible companies.
• Flexible management: LLCs have more freedom when determining their management structures. Members are allowed to choose to manage the business themselves or appoint managers.