How to Form an LLC in Delaware

Delaware is the state most people have heard of for forming a company, and it is a good fit for some businesses and a poor fit for others. Forming an LLC there takes one filing and a registered agent in the state. What decides whether it is worth it is the yearly tax, and whether you need what Delaware is known for. This guide explains how Delaware LLC formation works, what it requires, and who it suits. To have it filed for you, see our LLC formation service.

Why people choose Delaware

• Well-developed business law. Delaware's LLC law is detailed, and its Court of Chancery is a business court that hears company disputes without a jury. Investors and lawyers know the rules.
• Privacy. The formation document does not have to list the members or managers.
• Flexibility. The owners can set most of the rules for the LLC in the operating agreement.

These matter most to a company that plans to raise money, hold investments or have several owners. A small business that sells in one other state may gain little from them.

What Delaware requires

• A name that is available. It must be different from the names already on file and must include "Limited Liability Company", "L.L.C." or "LLC".
• A registered agent with a Delaware street address. It receives legal papers and official mail. A PO box is not accepted. Owners who do not live in Delaware use a registered agent service.
• A Certificate of Formation. This is the formation document in Delaware, filed with the Delaware Division of Corporations, which publishes its guidance at corp.delaware.gov.
• The state's filing fee. It is paid when you file. Check the state's site or our LLC filing fees by state table for the current figure.

Delaware does not require an owner who is a US citizen, a Delaware resident or a Social Security Number. A non-resident can form a Delaware LLC; see LLC formation for non-residents.

Steps to form a Delaware LLC

1. Choose the name and check that it is available.
2. Appoint a registered agent in Delaware.
3. File the Certificate of Formation with the Division of Corporations.
4. Write an operating agreement, which is not filed with the state.
5. Apply for an EIN, as explained on the IRS Employer ID Numbers page, or through our EIN service.
6. Open a business bank account. See US business bank account.

The yearly cost to keep a Delaware LLC

A Delaware LLC does not file an annual report. It pays a flat annual tax to the state, due on June 1 each year. The registered agent is also renewed every year. The tax is owed whether or not the company earns anything, and a late payment carries a penalty and interest, so it is the cost to compare against other states. See the state's page on paying taxes for the current amount.

Delaware and your own state

If the business really operates in another state, that state usually requires the LLC to register there as a foreign company, and it may charge its own fees and taxes. Then you pay for both states. Delaware makes the most sense when the business has no real base in a single state, such as an online business owned from abroad, or when Delaware's rules matter to your investors.

Frequently asked questions

Is a Delaware LLC taxed less?

Not by itself. An LLC is normally a pass-through for tax, and where the business operates and where the owners live decide the tax. Delaware's own tax on the LLC is the flat yearly tax.

Do I need a Delaware office?

No. A registered agent's address in the state is enough for the state's purposes.

Can a non-resident form a Delaware LLC?

Yes. You also need an EIN, and a foreign-owned single-member LLC files a yearly information return with the IRS even with no tax due. See US LLC tax filing.

This is general information, not legal, tax or financial advice. Fees and deadlines change, so check the Delaware Division of Corporations' own website before you file.