This is the first and most important step in starting your LLC. Do some research to make sure the name you choose is suited to your business venture and is easily searchable by potential clients.
- Follow the Delaware naming guidelines: Your entity name must contain the words Limited Liability Company or the abbreviation L.L.C. or LLC. Restricted words require additional paperwork (e.g. Banc, Bank, Banque, etc) and/or licensed individuals (e.g. Doctor, Engineer, etc). to be part of the LLC. Prohibited words are those that would confuse the name of your LLC with a federal or state agency (e.g. FBI, Secret Service, Treasury etc.)
- Is the name available in Delaware? Make sure the name isn't already taken by doing a name search on the State of Delaware website.
- Is the URL available? Check to see if the name of your LLC is available so that you can reserve your domain name. Even if you don't plan to make a website today, you may want to buy the domain name in order to prevent others from acquiring it.
An email address is also something to consider when choosing a name. Get a professional email (@yourcompany.com) with Google apps. Also get access to the top business tools, cloud storage, and business-grade security. - Try it for free
You are required to nominate a Registered Agent for your Delaware LLC.
What is a Registered Agent? A registered agent is a person or business nominated by your company to officially receive and send papers on your behalf including annual state filings.
Who can be a Registered Agent? The registered agent must be a resident of Delaware or a corporation authorized to transact business in Delaware. You may elect an individual within the company including yourself.
Click here to find out why you may want to use a registered agent service.
* Recommended: INCFILE.COM provides free registered agent service for the first year as part of their LLC Packages.
To register your LLC, you will need to file the Certificate of Formation with the state of Delaware.
File the Certificate of Formation for a Domestic LLC.
Download the PDFCertificate of Formation - Domestic Delaware LLC
Fee: Nonrefundable $90 payable to Secretary of State. An additional $100 for expedited services.
Follow the instructions on the PDF.
Important: If you're expanding your existing LLC to the State of Delaware you are forming a Foreign LLC. Learn how.
What is an Operating Agreement? An operating agreement is a legal document outlining the ownership and operating procedures of your LLC. This agreement allows you to form financial/working relationships with co-owners into an established system suitable to your business. An Operation Agreement is mandatory for both single member and multi member LLCs in Delaware.
* Recommended: We provide a free sample operating agreement however we recommend getting one professional drafted by a lawyer, especially if you are starting a multi-member LLC.
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.
Why do I need an EIN? An EIN is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done by one of two ways:
* Important: An EIN is obtained after the LLC is formed. Obtaining an EIN registers the company for federal taxes.
Opening a business bank account is an important first step, as it:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Getting a business credit card allows you to:
- Separate personal and business expenses.
- Build your company's credit history, which can be useful to raise money for your company later.
* Recommended: Compare business credit card offers at CreditCards.com.
Do I need to register for State taxes?
- If you have hired Employees in Delaware, you will need to register for Unemployment Insurance Tax and Employee Withholding Tax on behalf of your Employees.
- Delaware is one of four states that does not impose a sales tax on taxable goods or services. However, some business may be subject to Delaware’s Gross Receipts tax.
- All Delaware LLCs must file and pay a Franchise Tax.
- All businesses in Delaware are required to obtain a business license.
Register for Delaware Taxes by visiting the Delaware One Stop.
Even if you haven’t officially opened for business – it’s critical to get your books in order. A well managed accounting system will help you:
- Track your business finances, including bills, expenses and income.
- Simplify your annual tax filings.
The right software makes accounting easy. Look for software that:
- Syncs with your bank automatically.
- Matches transactions to invoices, bills and purchase orders.
- Can be accessed from your phone.
*Recommended: Xero has the features that all small businesses need.
Try Xero FREE for 30 days and get 30% off your first 6-months.
Do I need business licenses and permits?
To operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
Find out how to obtain necessary licenses and permits for your business:
- Federal: Use the U.S. Small Business Administration (SBA) guide to federal business licenses and permits.
- State: If you haven't already, visit the State of Delaware Business One Stop where you can register for taxes and obtain business licenses.
- Local: Contact your local Chamber of Commerce and ask about local licenses and permits.
- Alternatively, you can use a professional service to research all of your business licensing needs.
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.
What is Workers Compensation Insurance? This form of insurance is required for most businesses with employees, but varies by state. Click here to learn more.
What is General Liability Insurance? This is an important service, but is not required in most states. Click here to learn why.
How much will the right insurance cost you? Click here to find out.
Once a business decides to hire employees, certain legal obligations are required, such as:
- Ensuring that potential employees are eligible to work in the US
- Reporting employees as "new hires" to the State
- Providing workers compensation insurance for employees
- Withholding income taxes
- Printing compliance posters and place in a conspicuous location
- Ensuring payment of employees in specific increments as required by the state
A great resource for posting jobs and finding qualified employees is Indeed.com
How to Start a Business
in Delaware
5 easy steps to starting a business in Delaware.
We have a far more detailed guide - How to Start a Business which will go over the points in more details.
- Identify a suitable business idea that works for you - Check out our Business Ideas Tool.
- Critically analyze your idea with our Lean Business Model Canvas Tool. You can then go on to create a full business plan with our Free Online Business Plan Tool.
- Formally organize your Business into a company. An LLC is the most popular way to structure your business. Learn how to Form your LLC in Delaware.
- Complete important key steps after formation such as acquiring business licences & permits, registering for state taxes, and opening a business bank account.
- Build your website and develop your brand. Learn more about marketing and brand establishment.
To maintain a Delaware LLC, it is necessary to make periodic filings with the State of Delaware. Learn how to keep your LLC in good standing and avoid state penalties.
Franchise Tax
In Delaware, all LLCs are required file and pay an annual franchise tax.
File Franchise Tax with the State of Delaware
File OnlineTax Calculation: $300 for all LLCs
Due Date: Tax filing and payment due on or before June 1st
Late Filings
Delaware charges a penalty of $200 plus 1.5% interest per month if you miss the June 1st filing deadline.
Prevention
A registered agent service can help you avoid penalties and additional fees by notifying you of upcoming filing deadlines and submitting reports on your behalf.
Recommended: INCFILE.COM offers a reliable registered agent service.
Other Requirements
LLCs are considered “pass-through” entities and do not ordinarily pay income tax directly. Nevertheless, some states require certain LLCs to report income for informational purposes. Delaware requires most multi-member LLCs to file an informational tax return on Delaware form 300-I.
Filing Forms with Instructions: Delaware Partnership Return Instructions
A Certificate of Good Standing verifies that your LLC was legally formed and has been properly maintained. In Delaware, a Certificate of Good standing is known as a Certificate of Status. 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
To order a certificate of Good Standing in Delaware, simply download and complete the Corporate Certification Memo
Short Form Certificate Request Fee:$50
Long Form Certificate Request Fee:$175
Fax your request to: 302-739-3812
Mail your request to:
Division of Corporations
401 Federal Street
Suite 4
Dover, DE 19901
How to dissolve a Delaware LLC
If you no longer wish to conduct business with your 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 LLC, there are two broad steps:
- Close your business tax accounts
- File the Articles of Dissolution
If you have an existing LLC and want to register to do business in Delaware, you will need to form a foreign LLC.
How to File a Foreign LLC in the Delaware
Fee: $200 — Follow the instructions on the PDF.
Benefits of Forming a Foreign LLC
The major benefit of becoming a foreign corporation is that it allows your company to operate as one entity in many jurisdictions. For example, if you originally incorporate your LLC the State of Delaware, you can file your existing domestic LLC as a foreign corporation in other states.