How To Start A Series LLC In Delaware
A series LLC in Delaware is a special type of LLC that provides specific liability and tax benefits to its owners and members. The series LLC consists of a master LLC and one or more individual series remove llcthat branch off from it.
If you want to learn more about the basics of series LLCs, check out our What is a Series LLC page.
Starting your own Series LLC in Delaware doesn’t have to be difficult. Our step-by-step guide makes it simple!
Step 1: Name Your Delaware Series LLC
Before naming your series LLC, you should know the answers to these questions:
- What are the laws for naming a series LLC?
- What are some general tips for naming a series LLC?
- Is my business name available in Delaware?
- Is my business name available as a URL and if so, how do I buy it?
1. Series LLC naming rules vary from state to state. In Delaware, the name of each child series must contain the name of the parent LLC and be distinguishable from the name of any other child series. Remember you are also required to follow the traditional LLC naming rules.
Follow the required Delaware LLC Naming Rules:
- 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.
- 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.
2. Consider these general tips for making your series’ names more recognizable, uniform, and clear:
- Use the word “protected series” within the name of each company.
- Name the parent LLC in a way that distinguishes it from the child series.
- Include the full name of the parent LLC in the name of each child series.
- The name of the child series should include the name of the assets it holds. This creates a clearer asset picture to the public and creditors.
Example of a series LLC naming system that uses both the state of Delaware requirements and general tips:
My Holdings Co., LLC, a series LLC
123 Main Street, LLC, an individual protected series of My Holdings Co., LLC, a series LLC
123 Division Street, LLC, an individual protected series of My Holdings Co., LLC, a series LLC
3. Is your business name available in Delaware? Make sure the name you want isn't already taken by doing a name search on the State of Delaware's website.
4. Is your business name available as a URL? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.
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Use a DBA, also called a trade name in Delaware, for the child series if the name is too long for good business branding.
Not sure what to name your business? Check out our LLC Name Generator.
Step 2: Choose a Delaware Series LLC Registered Agent
You are required to nominate a Registered Agent for your Delaware LLC. The Registered Agent for the parent LLC will need to be the same for each child series.
What is a Registered Agent? A registered agent is a person or business that agrees to send and receive legal papers on behalf of your LLC. Such papers include service of process of legal action (if you are sued) and state filings.
Who can be a Registered Agent? A 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.
Learn more about the role of a registered agent and why you should consider hiring a professional service.
Recommended: Northwest provides registered agent services for series LLCs. A subscription will need to be purchased for each LLC in the series ($125/year/LLC).
Step 3: File The Certificate of Formation
To register your series LLC, you will need to file the Certificate of Formation with the Delaware Secretary of State. This can be done by mail or in person. In Delaware, you are only required to file a Certificate of Formation for the parent LLC.
Experts suggest going beyond Delaware’s requirements by adding specific language about the series LLC in an addendum to the Certificate of Formation. We recommend hiring an attorney to advise you.
The cost of filing the certificate of formation is $90.
We recommend working with an Attorney to help you complete your series LLC Certificate of Formation.
Or read our free guide to form a standard single or multi-member LLC in Delaware
Step 4: Create A Series LLC Operating Agreement
An operating agreement is required when forming a series LLC in Delaware. The operating agreement doesn’t have to be filed with the state.
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? The operating agreement is important for a Delaware series LLC because it creates the protection between the child series and parent LLC. The operating agreement outlines the liability limitations (asset protection) of the child series.
We recommend working with an attorney to draft your Delaware series LLC operating agreement.
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New child series can be added to the series LLC by amending the operating agreement.
Step 5: Obtain an EIN
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. Each of the child series in your series LLC will require an EIN.
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
How do I create an EIN for my series LLC? The IRS doesn’t have specific guidelines for creating an EIN for the child series of a series LLC. Experts suggest using the name of your series LLC combined with the child series name for each additional EIN.
Example Series LLC EIN
Series LLC Name: My Holdings Co., LLC, a series LLC
EIN entry: My Holdings Co LLC a series LLC
Child Series Name: 123 Main St., LLC, an individual protected series of My Holdings Co., LLC, a series
EIN Entry: 123 Main St LLC an individual protected series of My Holdings Co LLC a series
Get an EIN
Option 1: Request an EIN from the IRS
- OR -
Option 2: Apply for an EIN by Mail or Fax
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
Fee: Free
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 online or by mail.
FOR INTERNATIONAL APPLICANTS: You do not need an SSN to obtain an EIN. Read more about applying for an EIN as an International here.
Key Steps After Forming a Series LLC
Now that you have formed your Delaware series LLC, these are the next steps you will need to take to move your business forward.
Open a Business Banking Account
A dedicated business banking account is required for each child series of a series LLC. Without dedicated accounts, the child series are NOT protected from liabilities incurred by the other child series or the parent LLC.
Set Up Accounting
Accounting and record keeping for the series LLC MUST be clear, concise, and separate. Without careful record keeping, your series might not be protected. Separate record keeping helps ensure the courts will never allow a creditor or plaintiff to pierce the corporate veil.
Recommended: Use an accounting service to help with managing your Delaware series LLC.
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Expenses are sometimes shared across the series. For example, the series might share office space. Shared costs like rent can be spread out between the child series but it must be done in a logical way that will be defensible in court.
Register Your Series for Delaware State Tax
We recommend consulting a tax professional for help in tax planning and filing for your series LLC.
Maintain your LLC: Avoid fines and the risk of dissolution
Franchise Tax
In Delaware, all series LLCs are required file and pay an annual franchise tax. This can be done online. The annual report will be filed by the parent LLC on behalf of all of the entities in your series LLC. Your franchise tax will be based on this information too.
Franchise Tax in the State of Delaware
File Online with the Delaware Department of State
FILE ONLINEFee: Free
Tax 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.
State Income Tax
Reporting income for your series LLC is best handled by an accountant who is familiar with series LLC tax code.
Delaware requires most multi-member LLCs to file an informational tax return on Delaware form 300-I. This can be done by mail.
File Your Tax Return
File your Delaware Partnership Return by Mail with the Delaware Department of Revenue
Download FormFee: Free
For instructions on how to fill out Form 300-I, see the instructions document from the Delaware Department of Revenue website.
Mail to:
Division of Revenue
P.O. Box 8703
Wilmington, DE 19899
Report LLC Income
Reporting income for your series LLC is best handled by an accountant who is familiar with series LLC tax code.
Avoid Dissolution
Series 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 even submitting reports on your behalf for an additional fee.
Recommended: Northwest offers a reliable registered agent service and excellent customer support.
Become a knowledgeable LLC owner. Learn more about these important topics.
Obtain a Certificate of Good Standing
A Certificate of Good Standing verifies that your series 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 Certificate of Good Standing online.
Order a Certificate of Good Standing
Request a Certificate by Mail from the Delaware Division of Corporations
Order OnlineFee: $50 for a Short Form Certificate, $175 for a Long Form Certificate, payable to the Secretary of State (Nonrefundable)
Mail or deliver your request to:
Division of Corporations
401 Federal Street
Suite 4
Dover, DE 19901
Fax your request to:
302-739-3812
Dissolve Your Delaware LLC
If at any point in the future 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
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Closing a child series will not dissolve the parent LLC. Dissolving the parent LLC will dissolve all of the child series under it.