Delaware LLC

Form a Delaware LLC

Allow LawInc to properly form your Delaware LLC. We are the LLC experts and provide personal t LawInc we are Delaware LLC formation experts who can help you form a Delaware LLC, the right way. We file the Delaware LLC Certificate of Formation with the Delaware Secretary of State and prepare a customized operating agreement. We can also obtain the Delaware LLC’s EIN, in an quickly as 24 hours.

A Delaware LLC can help protect your personal assets, such as your house, automobile or family savings. In the event of a lawsuit or if your business should fail, your personal assets cannot be touched, assuming you have properly formed, capitalized and maintained your LLC. This limited liability feature of a Delaware LLCs is not available in a sole proprietorship or general partnership, where the business owners are personally liable for all business debts.

Allow LawInc walk you through the Delaware Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.

Delaware LLC Name

The first step in forming a Delaware Limited Liability Company (LLC) is selecting the business name. Delaware LLC names:

  • Must contain with “Limited Liability Company,” “Ltd. Liability Co.,“ LLC,” “L.L.C,” “LC” or “L.C.”
  • Must be distinguishable from the name of any domestic or foreign LLC, corporation, non-profit corporation, limited partnership, limited liability partnership on file with the Delaware Secretary of State.
  • Must not imply that it was formed for a business purpose different than that stated in the Delaware Certificate of Formation or that is unauthorized by law.

An available name may be reserved for a 120-day period.

A Delaware Limited Liability Company may apply to choose a name that is indistinguishable from the Secretary of State records if the other entity consents to the use in writing.

LawInc.com permits you to choose up to three names and will conduct a name search for your Delaware LLC, prior to filing.

Delaware LLC Formation

Delaware LLC Filing Procedure: When forming a Delaware LLC, a Delaware Certificate of Formation must be filed with the Delaware Secretary of State. The filing fee is $300. The Delaware Certificate of Formation must state the:

  • Delaware LLC name.
  • Entity type.
  • Purpose of the Delaware LLC, which may be stated to be or include any lawful purpose for that type of entity.
  • Delaware LLC duration, if it is not formed to exist perpetually.
  • Delaware LLC address and registered agent address.
  • Name and address of each Delaware LLC organizer.

Delaware LLC Publication: Delaware LLCs have no publication requirement.

Delaware LLC Organizers: An Delaware limited liability company can be formed by one (1) or more individuals, 18 years or older.

Delaware LLC Members: Delaware LLCs require 1 or more members. There is no residence or age requirement. Delaware LLC members are not required to be listed in the Articles of Organization.

Delaware LLC Duration: The period of duration of a limited liability company shall be perpetual unless the Delaware Articles of Organization place a limitation on the company’s existence or until dissolution or termination.

Delaware LLC Registered Agent: An Delaware LLC must maintain a registered agent and office to receive service of process in Delaware. The Delaware registered agent should be available, at an Delaware physical address, during normal business hours to accept important legal and tax documents on behalf of the Delaware LLC.

Delaware LLC Operating Agreement: After filing, it is highly advised that an operating agreement is drafted which dictates the LLC internal affairs and management. There is no set criteria, but an Delaware LLC operating agreement should reference how the Delaware LLC is managed, allocation of profits and losses and member capital contributions. The Delaware LLC operating agreement does not need to be filed.

Delaware LLC Post-Filing/Ongoing/Annual Requirements

Delaware LLC Annual Franchise Tax: Delaware LLCs are required to pay an annual tax of $250.00. Taxes for these entities are to be received no later than June 1st of each year. For more information, visit: http://corp.delaware.gov/paytaxes.shtml

Delaware LLC Annual Report: The Delaware Secretary of State does not require Delaware LLCs to prepare or file Annual Reports.

Delaware LLC Taxes

Delaware LLC Taxation: Delaware LLCs are classified for Delaware tax purposes based on their federal income tax classification. The LLC tax rate for Delaware is variable, depending on Delaware taxable net income.

Delaware LLC Federal Income Tax: An advantage of the LLC is its tax flexibility. LLC members are allowed to select how the entity will be taxed. An LLC may be classified for federal income tax purposes as either a:

  • Sole proprietorship
  • Partnership, or
  • Corporation.

Single member LLCs are treated the same as sole proprietorships. Profits are reported on Schedule C as part of your individual 1040 tax return. Self-employment taxes on Delaware LLC net income must be paid just as you would with any self-employment business.

Most Delaware multi-member LLCs elect to be treated as partnerships by the IRS and file IRS Form 1065. On this form, Delaware LLC profits are reported and allocated to each of the owners according to the Delaware LLC’s operating agreement. Each owner is given a Schedule K-1, which shows each owner’s share of LLC income or loss. The owner then reports and pays taxes on this income on the owner’s annual 1040 income tax return. It is important to note that as with sole proprietorships, all Delaware LLC profits are taxed to the owners, even if they are not actually distributed by the LLC. This situation can arise when the LLC needs to use its profits to pay ongoing expenses.

If pass-through taxation is not desired, an LLC may elect to be taxed as a corporation by completing IRS Form 8832. If this election is made, the LLC is taxed as a C corporation by the federal government. Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to the taxable income of non-corporate taxpayers, it is possible a net income tax savings can result from this tax election. Additionally, an LLC can be taxed like an S corporation by filing IRS Form 2553.

Delaware LLC Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. An EIN is typically required if the Delaware LLC has more than one owner, or any employees.Delaware LLC Dissolution/Cancellation

Delaware LLC Dissolution/Cancellation: In order to dissolve or cancel an Delaware LLC, the members or managers must file a Certificate of Cancellation of a Limited Liability Company form with the Delaware Department of State. The Certificate of Cancellation must be accompanied by a check for any tax payment due at the time of cancelling your Delaware LLC. Accordingly, you should contact the Delaware Department of State Franchise Tax Section concerning any taxes due at the time of cancelling your Delaware LLC.

Acts Triggering Delaware LLC Dissolution: A Delaware LLC can be dissolved upon the happening of one of the following:

  • Events specified in the articles of organization or operating agreement
  • Consent by the specific number or percentage of members indicated in the operating agreement.
  • Event that makes it illegal for the Delaware LLC to continue.
  • When a member leaves the Delaware LLC, unless either of the following applies: Within 90 days, the remaining members agree to continue the business or the company continues under a right specified in the operating agreement.
  • Judicial decree.