How To Start An LLC in Delaware: Best Guide

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Starting a limited liability company in Delaware requires legal steps and requirements confirming that your business is duly registered and recognized. So, these required some steps

This guide will show you the simple process involved in how to start an LLC in Delaware. 

How to Start An LLC in Delaware

Forming an LLC in Delaware LLC filing a Certificate of Formation with the Delaware Department of State.

The Certificate of Formation is the legal document that officially establishes your Delaware limited liability company.

You can apply online or by mail for $90.

Steps To Start an LLC in Delaware

Here are the steps involved in starting your LLC in Delaware

  • Name Your Delaware LLC
  • Choose a Registered Agent
  • File the Certificate of Formation
  • Create an Operating Agreement
  • Get an EIN

However, you can simply seek professional service. 

Name your Delaware LLC

Firstly, you have to choose a company name for your LLC, following the requirement and guidelines for selecting names. 

To choose a name, you must ensure that:

  • Your business name must include ability company” or its abbreviations (LLC or L.L.C.). 
  • Ensure that your name is distinguishable from any Delaware limited liability company, corporation, limited partnership, or registered limited liability partnership business name. 
  • Ensure the name you desire isn’t already taken by doing a Business Entity Search on the Delaware Secretary of State’s website.
  • Your business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
  • Also, it can’t contain certain restricted words like bank, lawyer, attorney, credit union, etc.
  • Ensure to Reserve the name once you find the availability: You must complete the Name Reservation Request for Domestic Entities form at least two weeks before registration or reserve your business name when completing the online LLC registration.
  • Consider if the URL is available: Check online to see if your business name is known as a web domain. If it is, you may want to buy the URL to prevent others from acquiring it.

Choose a Registered Agent in Delaware

A registered agent is an individual or business entity responsible for obtaining basic tax forms, legal documents, a notice of lawsuits, and official government correspondence on behalf of your business. 

Your LLC in Delaware required you to nominate a registered agent. 

Your registered agent must be a resident of Delaware or a corporation, such as a registered agent service, approved to transact business in Delaware. 

However, you may elect an individual within the company, including yourself, to stand as a registered agent. 

File the Certificate of Formation

The next thing to do to register an LLC in Delaware is file the Certificate of Formation with the Delaware Department of State.

When you file online with the Delaware Department of State, you will need to download the pre-filled Certificate of Formation, sign it, and upload it for filing.

You can also apply online or by mail 

Mailing Address:

Delaware Division of Corporations

401 Federal St.

Suite 4

Dover, DE 19901

Note: Mailed filings of Certificate of Formation must include a cover sheet.

This certificate is fillable for a nonrefundable fee of $90, payable to the Delaware Department of State. 

Create Your Operating Agreement

An operating agreement is a legal document establishing the ownership and operating procedures of a limited liability company. 

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Though an operating agreement is not required for an LLC in Delaware, it’s a good practice to have one.

This document contains a comprehensive operating agreement that ensures all business owners are on the same page and reduces the risk of future conflict.

Get Your EIN

EIN stands for Employer Identification Number, a nine-digit number allotted by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. 

It is a Social Security number for a business, and it is sometimes referred to as Federal Tax Identification Number (FTIN).

An Employer Identification Number is required to:

  • Open a business bank account
  • File and manage Federal and State Taxes
  • Hire employees

You can get EIN from the Delaware IRS, which can also be done online or by email.

You can apply for an EIN by Mail or Fax

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

What To Do After Forming an LLC in Delaware

Having learned how to start an LLC in Delaware, it is essential to protect your business.  

You can protect your business by taking some legal steps and separating your personal and business assets to avoid the risk that your LLC is sued. 

You can also follow these steps below to protect your LLC in Delaware:

Opening a Business Account

You may have to separate your personal assets from your company’s assets, which is necessary for personal asset protection.

This also makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you separate all business expenses for end-of-year tax purposes.

It also helps you build your business credit score, which is essential for getting a line of credit or business loan. 

In addition, it allows you to keep track of department expenses by issuing multiple cards to your employees.

Hire a Business Accountant

To prevent your business from overpaying on taxes while helping you avoid penalties, fines, and other costly tax errors, you may have to hire a business accountant. 

Doing this makes bookkeeping and payroll easier, giving you more time to focus on your growing business 

Furthermore, it helps you manage your business funding more effectively, discovering areas of unforeseen loss or extra profit

Get Your Business Insurance

Getting business insurance helps you manage risks and focus on growing your LLC. 

The common types of business insurance are:

General Liability Insurance: This broad insurance policy protects your business from lawsuits. 

Professional Liability Insurance: This business insurance is for professional service providers (consultants, accountants, etc.) and covers malpractice claims and other business errors.

Workers’ Compensation Insurance: This type provides coverage for employees’ job-related illnesses, injuries, or deaths. In Delaware, businesses with one or more employees, excluding officers and LLC members, must have workers’ compensation insurance.

Create Your Business Website

To legitimize your business, you need to create a business website. 

Every business needs a website to avoid missing out on many potential customers and revenue.

Send Out a Press Release

To provide publicity, you need to do press releases to promote your business. 

This is because they are also one of the most cost-effective strategies to establish your brand presence on the web. 

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Also, they provide publicity, improve your website’s search engine optimization (SEO), drive more customers to your website, and have long-lasting benefits.

Keep Your Business Licenses and Permits

You must comply with federal, state, and local government regulations to operate your business in Delaware. 

You must obtain and keep your business licenses and permits from your state. 

For instance, for a restaurant’s LLC, you must obtain permits like; need health permits, building permits, signage permits, etc.

However, the details of business licenses and permits vary from state to state. 

The fees also vary depending on what sort of license you are seeking to obtain.

Tax Filing Requirements

Depending on the nature of your business, you may have to register for one or more forms of state tax.

You must register for sales tax if you sell a physical product; you’ll typically need to register for a seller’s permit online through the State of Delaware website.

Some of the tax filing requirements are: 

Delaware Sales Tax

This is required if you are selling a physical product.

You must register for a seller’s permit through the Delaware Department of Revenue Services.

Meanwhile, the certificate allows a business to collect sales tax on taxable sales.

Delaware Employee Tax

If you have employees in your LLC in  Delaware, you must register for Unemployment Insurance Tax with the Delaware Department of Labor Tax and Benefits System. 

Also, the Employee Withholding Tax with the Delaware Department of Revenue Services.

Delaware Gross Receipts Tax

This Delaware Gross Receipts Tax is evaluated on the total gross revenue of all businesses operating in the state. 

The actual gross receipts tax rate will depend on your type of business.

Hiring Employees

If you plan to hire employees for your LLC in Delaware, you need to abide by the law and follow these steps:

You must: 

  • Verify that new employees have US work permits. 
  • Report employees as “new hires” to the State
  • Provide workers’ compensation insurance for employees
  • Withhold employee taxes
  • Print workplace compliance posters and place them in visible areas of your workspace

How to Start A Foreign LLC in Delaware

If you have an existing LLC and you want to extend the business to Delaware, you need to register as a foreign LLC. 

This is because forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Delaware, you must register as a foreign LLC. This can be done online.

You can do this by 

  • Fling online with the Delaware Secretary of State for a nonrefundable fee of $200.
  • Filing by Mail or In Person

Mail to:

Delaware Division of Corporations

401 Federal Street

Suite 4

Dover, DE 19901

How to Obtain a Certificate of Good Standing in Delaware

In Delaware, the certificate of good standing is also called the certificate of legal standing. 

With a certificate of good standing, your business is verified that it was legally formed and adequately maintained in Delaware. 

Meanwhile, you can order a Delaware LLC Certificate of Good Standing online for free. 

You might need to get your certificate of legal standing if: 

You will seek funding from banks or other lenders

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You might form your business as a foreign LLC in another state

You will obtain or renew specific business licenses or permits

You can order a Certificate of Legal Existence online or by mail.

Online: Request a Certificate Online Through the Delaware Secretary of State.

Mail or person: Request a Certificate by Mail or In-Person. 

How To Order A Certificate Of Status

It is essential to request a Certificate of status by Mail from the Division of Corporations

This certificate costs $50 for a Short Form Certificate and $175 for a Long Form Certificate, which is payable to the Secretary of State, and it is also nonrefundable. 

You can file through the mail via: 

Mail to:  

Division of Corporations  

401 Federal Street  

Suite 4  

Dover, DE 19901

Fax to: 

(302) 739-3812

Conclusion

As simple as forming an LLC in Delaware is, it requires some legal steps and requirements, which have been clearly explained in this guide. 

We hope this article answers your questions on how to start an LLC in Delaware. 

Don’t forget to share if you find it helpful. 

If you have comments, kindly drop them in the comment box. 

We wish you luck in your LLC formation! 

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