How to Form an LLC in Delaware

Forming an LLC in Delaware Is easy

To form an LLC in Delaware you will need to file a Certificate of Formation with the Delaware Department of State, which costs $90. You can apply by mail or in person. The Certificate of Formation is the legal document that officially creates your Delaware limited liability company.

Follow the step-by-step guide below to form a Delaware LLC today and get your business up and running. To learn more about LLCs and their benefits, please read our What Is an LLC guide.

STEP 1: Name your Delaware LLC

Choosing a company name is the first and most important step of starting an LLC in Delaware. Be sure to choose a name that complies with Delaware naming requirements and is easily searchable by potential clients.

1. Follow the naming guidelines:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
• Your name must be distinguishable from any other Delaware limited liability company, corporation, partnership, or limited partnership.

2. Is the name available in Delaware? Make sure the name you want isn't already taken by doing a Delaware Entity Search on the Department of State's website.

To learn more about searching for a Delaware LLC name, read our full guide.

3. Is the URL available? We recommend that you check online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Not sure what to name your business? Check out our LLC Name Generator. Then, create a logo with our Free Logo Generator.

FAQ: Naming a Delaware LLC

STEP 2: Choose a Registered Agent in Delaware

You are required to nominate a Delaware registered agent for your LLC.

What is a registered agent? A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business's point of contact with the state.

Who can be a registered agent? A registered agent must be a resident of Delaware or a corporation, such as a registered agent service, authorized to transact business in Delaware. You may elect an individual within the company including yourself.

To learn more about Delaware Registered Agents, read our full guide.

Recommended: ZenBusiness includes Registered Agent Service with their LLC formation package ($39 for the 1st year + State Fees).

FAQ: Nominating a Delaware Registered Agent

STEP 3: File the Delaware LLC Certificate of Formation

To register an LLC in Delaware, you will need to file the Certificate of Formation with the Department of State. You can apply online or by mail.

Now is a good time to determine whether your LLC will be member-managed vs. manager-managed.

For help with completing the form, visit our Delaware Certificate of Formation guide.

If you’re expanding your existing LLC to the state of Delaware, you will need to form a Foreign LLC.

FAQ: Filing Delaware LLC Documents

STEP 4: Create Your Delaware LLC Operating Agreement

An operating agreement is not required for a Delaware LLC, but it's a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

For more information on operating agreements, read our Delaware LLC operating agreement guide.

FAQ: Creating a Delaware LLC Operating Agreement

STEP 5: Get a Delaware LLC EIN

What is an EIN? EIN stands for Employer Identification Number. EINs are a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a Social Security number for a business.

An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).

Why do I need an EIN? An EIN is required to:

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

What if I already have an EIN for my sole proprietorship? The IRS requires that sole proprietorships get a new EIN when converting to an LLC.

Where do I get an EIN? You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.

FOR INTERNATIONAL EIN APPLICANTS: You do not need a SSN to get an EIN. For more information, read our How to Get an EIN as a Foreign Person guide.

FAQ: Getting a Delaware LLC EIN

Important Steps After Forming an LLC

Separate Your Personal and Business Assets

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Delaware LLC is sued. In business law, this is referred to as piercing the corporate veil.

You can start protecting your LLC in Delaware with these steps:

1. Opening a business checking account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Need help finding your EIN for your bank application? Visit our EIN Lookup guide for help.

2. Getting a business credit card:

• Helps you separate personal and business expenses.
• Builds your company's credit history, which can be useful to raise capital (e.g., small business loans) later on.

For other important steps to protect your corporate veil, like properly signing legal documents and documenting company business, please read our corporate veil article.

3. Hiring a business accountant:

• Prevents your business from overpaying on taxes while helping you avoid penalties, fines, and other costly tax errors
• Makes bookkeeping and payroll easier, leaving you with more time to focus on your growing business 
• Manages your business funding more effectively, discovering areas of unforeseen loss or extra profit

For more business accounting tools, read our guide to the best business accounting software.

Get Business Insurance for Your Delaware LLC

Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers claims of malpractice and other business errors.
• Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths.

Read our review of the best small business insurance companies.

Create Your Business Website

Creating a website is a big step in legitimizing your business. Every business needs a website. Even if you think that your business is too small or in an offline industry, if you don’t have a website, you are missing out on a large percentage of potential customers and revenue.

Some may fear that creating a business website is out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own and control.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

Send Out a Press Release

Press releases are among the easiest and best ways to promote your business. They are also one of the most cost-effective strategies as they:

• Provides publicity
• Establish your brand presence on the web
• Improve your website’s search engine optimization (SEO), driving more customers to your website
• Are a one-time cost in terms of effort and money
• Have long-lasting benefits

Keep Your Company Compliant

Delaware LLC Business Permits and Licenses

To operate your Delaware LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.

The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.

Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.

Find out how to obtain necessary licenses and permits for your business or have a professional service do it for you:

• Federal: Use the U.S. Small Business Administration (SBA) guide.
• State: Visit the State of Delaware Business One-Stop where you can register for taxes and obtain business licenses.
• Local: Contact your local county clerk and ask about local licenses and permits.

Delaware LLC Tax Filing Requirements

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

Delaware Sales Tax

Delaware is one of five states that does not impose a sales tax on taxable goods or services. However, some businesses may be subject to Delaware’s Gross Receipts Tax.

Delaware Employer Taxes

If you have employees in Delaware, you will need to register for Unemployment Insurance Tax on the State of Delaware website. Employers who are required to pay Employee Withholding Tax must register online with the Delaware Division of Revenue.

Delaware Gross Receipts Tax

The Gross Receipts Tax is assessed on the total gross revenue of all businesses operating in the state. The exact gross receipts tax rate will depend on your type of business.

FAQ: Additional Delaware LLC Taxes

Federal LLC Tax Filing Requirements

Most LLCs will need to report their income to the IRS each year using:

• Form 1065 Partnership Return (most multi-member LLCs use this form)
• Form 1040 Schedule C (most single-member LLCs use this form)

How you pay yourself as an owner will also affect your federal taxes. Visit our guide to learn more about how to pay yourself from your LLC.

Franchise Tax

In Delaware, all LLCs are required to file and pay an annual franchise tax. This can be done online.

State Income Tax

Delaware requires most multi-member LLCs to file an informational tax return on Delaware form 300-I. This can be done by mail.

Avoid Automatic Dissolution

LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines and by submitting reports on your behalf.

Hiring Employees in Delaware

If you plan to hire employees for your Delaware LLC, stay compliant with the law by following these steps:

• Verify that new employees are able to work in the US
• 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

FAQ: Hiring Employees in Delaware

Small Business Resources

Women in Business Tools and Resources

If you have a woman-owned business, many resources are available to help you concentrate on your business’s growth:

• Funding - (ie. grants, investors, loans)
• Events - (ie. conferences, meetups)
• Guides - (ie. business formation, personal growth)
• Support - (ie. advice, communities, business strategies)

Our information and tools will provide educational sources, allow you to connect with other women entrepreneurs, and help you manage your business with ease.

Free LLC Legal Forms

TRUiC offers a number of free LLC legal forms to help with creating documents like:

• Operating agreements
• LLC resolutions
• Hiring documents, including:
  
  • Employment contracts
  • Independent contractor service agreements (ICSA)
  • Non-disclosure agreements (NDA)

All you’ll need to do to download the forms is sign up for the TRUiC Business Center, which is also free, forever.

How to Make a Website

Check out our how to build a website guide to learn how creating a website isn’t as difficult as it might seem. With the right tools, a good guide, and a bit of patience, you can learn how to make a website for your business in no time.

How to Build Business Credit

Learning how to build business credit can help you get credit cards and other business funding options in your business's name (instead of yours), with better interest rates, higher lines of credit, and more.

TRUiC’s Small Business Tools

TRUiC believes business tools should be free and useful. Our tools help solve business challenges, from finding an idea for your business, to creating a business plan, writing an operating agreement for your LLC, and more.

Check out TRUiC’s small business tools:

• Business Name Generator
• Business Idea Generator
• Free Logo Maker
• Operating Agreement Tool
• Business Plan Generator
• Entrepreneur Quiz

More Delaware LLC Information

Delaware Foreign LLCs

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 will need to register as a foreign LLC. This can be done by mail.

How to Obtain a Certificate of Good Standing in Delaware

A Certificate of Good Standing, known in Delaware as a Certificate of Status, verifies that your Delaware LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:

• Seeking funding from banks or other lenders
• Forming your business as a foreign LLC in another state
• Obtaining or renewing specific business licenses or permits

You can order a Delaware LLC Certificate of Status by mail.

How to Dissolve an LLC in Delaware

If at any point in the future you no longer wish to conduct business with your Delaware LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your Delaware LLC, there are two broad steps:

• Close your business tax accounts
• File the Delaware Articles of Dissolution

When you are ready to dissolve your LLC, follow the steps in our Delaware LLC Dissolution Guide.