If one series is continued, the assets of the other series will remain protected.
In addition, you do not have to pay any state income tax or income tax. intangibles, unlike most other states.
The Bad Parts of Starting an LLC in Delaware
If your primary place of business is a state other than Delaware, the registration process will become a bit more tedious for you.
You will need to register as a foreign entity in your home country, which involves several filing fees and reporting requirementsannual tion. You may also need to get a reputable Delaware certificate, which again costs a nominal sum of money.
Multiple-state registration and reporting also requires the presence of 'a registered agent in Delaware and your home state.
Although many LLC Services offer US registered agent services, you need to be careful about choosing the right one. Otherwise, you'll find yourself juggling different agents in different states.
While convenient, the fact that Delaware allows an oral LLC operating agreement may pose problems in the future. Conversations between LLC members can be interpreted and the parties involved can go back on their word.
With this in mind, it is best to have an operating agreement written, even when not required by law.
Step 1: Finalize the name of vOur Delaware LLC
Choosing a name is the first step in your LLC formation journey.
In Delaware, selecting Find the right business name is not only a question of branding, you must also meet specific legal requirements. Checking availability to make sure no other company has applied to the Division of Corporations is another necessity.
Follow naming guidelines
As in other states, Delaware law requires business owners to choose a unique name for their LLC. But there are also other guidelines to keep in mind, such as:
- The name of the LLC should be distinct from other Delaware LLCs, companies and partnerships
- The name of the LLC must include the expression "limited liability company" or one of its abbreviations (LLC or LLC)
- The name of the LLC may not not include words that couldt potentially confuse your business with a government agency (Treasury, FBI, State Department, etc.)
- You will need to complete additional paperwork and bring in an authorized person, such as a doctor or lawyer , if the name of the LLC includes restricted words (bank, lawyer, university, etc.)
Check the availability of the name
You will be penalized if you use a name that another Delaware company is already using. Make sure to search for the name you want on Delaware Entity Search on the Department of State website . If the name is available, you can use it. If someone else already has it, you will need to come up with a different name.
Check URL availability
You might have already thought about starting a website for your business. Even if you haven't, it is best to check if your business name is available as a web domain.
If you don 't plan to start a business website right away, I still recommend purchasing URL to prevent other companies from acquiring it.
Inion for a DBA (optional)
You can operate your LLC under a name other than the legal name of your business.
In this case, you need to register a DBA or "make ado as ”in the Delaware County you do business with. Fill in the Trade, company and fictitious name registration certificate form , and file it with each county superior court where you do business.
Remember that you will need to pay a $ 25 filing fee for this form and it must be notarized .
Step 2: Name a Delaware Registered Agent
It is mandatory to appoint a Delaware registered agent for your business if you want to start an LLC in the state .
A registered agent is an individual or business entity who receives important state and federal correspondence, tax forms, notices of lawsuit, and legal documents on behalf of you.our business. They are your company's point of contact with the state.
Additionally, that person or business entity must be a state resident or business entity with a mailing address in Delaware .
Although you can choose yourself as the registered agent of your business, I have found hiring an LLC service that offers reliable Registered agent services are more practice. Here are my top three picks:
File inc takes first place on our list of top LLC services , and not without reason.
It offers an extensive library of documents to help budding entrepreneurs determine what type of business they should be starting. It then helps them with documentation and filing procedures, all available for as little as $ 0. You only have to pay the state fee.
Plus, you get free registered agent services in the first year.
If you are looking for a wide range of online legal services, then don't look further than Rocket Lawyer.
This LLC service offers free training filing, legal documents, and up to 30 minute consultations on each new legal issue. I specifically recommend Rocket Lawyer to users who want have access to highly experienced lawyers to answer their questions after setting up a business.
The fact that you get 25% off registered agent services also makes it affordable.
You never have to worry about your papers when working with ZenBusiness.
The company offers a wide range of LLC services and ensures that your business is properly configured with the appropriate documents completed and delivered to the appropriate state authorities.
ZenBusiness plans include services such as LLC document preparation and filing, online document access, the name search for availability, and of course, the registered agent services.
Step 3: File your Delaware LLC training certificate
Next, you need to file your certificate of training (also known as Articles of Association in other states) online with the Delaware Division of Corporations and paying a filing fee.
As you have already incurred a LLC service to take care of your documentation, you don 't have to stress too much much about it. But since this is a necessary step, I will explain it in more detail.
Obtain a Delaware Business License
Delaware has strict ICT requirements for business licenses. You must obtain a licstate trading license with the Delaware Department of Revenue.
To obtain a business license, you must create a" One Stop "account and pay an administration fee. The fee amount varies depending on the type of business you run and can cost anywhere from $ 50 to $ 450.
After completing the online process, you will receiveeve a temporary license valid for 60 days. Permanent licenses are usually sent within 10 days.
Some cities and counties in Delaware may require you to obtain additional licenses. Therefore, it is best to contact local government agencies and find out if you will need additional licenses to operate your LLC in Delaware.
File Delaware LLC formation certificate
You can file the training certificate by filing it online with the Delaware Department of State or by mail.
You will need to submit your company name and registered agent information when filing , and it must be approved by the Delaware Secretary of State.
Delaware l aw requires you to file a training certificate only once. But you will need to file a certificate of modification and pay the required fee if you make any changes on behalf ofyour company or registered agent.
Store training certificate securely
Keep your training certificate, along with your other important documents, safe once the documents are recovered after approval. It might seem obvious, but you'll be surprised how many LLC owners misplace important documents. Don't be like them.
Step 4: Create Your Delaware LLC Operating Agreement
After receiving approval from the Division of Corporations, you now officially have a Delaware LLC. Congratulations!
However, there are a few more steps you still need to take before getting the final green light. For example, the owners of Delaware LLC must adopt an operating agreement.
An operating agreement is a legal document that describes the ownership of the business and the procedures for operating the business. 'a specification. ific LLC. This perms to ensure that all business owners are on the same wavelength, thus reducing the risk of future conflicts and misunderstandings.
Although the law does not specify when to must enter into the agreement, it is common practice to do so so soon after submitting your Training Certificate. Again, you can have a verbal agreement, but it is better to have a formal and written operating agreement.
Write the operating agreement
An operating agreement is a complete document. It should clearly describe your business structure, establish the individual responsibilities and obligations of each member, and detail how the LLC will be managed.
At a minimum, your operating agreement should include the following information :
- Objective of forming an LLC, including products and services offered
- Names and addresses of each member of the LLC, as well as the manager onif applicable
- Each member's valuable contribution to the LLP
- Each member's participation, voting rights and share of profit and loss
- Procedure for admitting new members
- Procedure for electing a director (if the LLC is managed by a director)
- Schedule of meetings and voting procedures
- Dissolution Process
Each member of the LLC must review and sign the operating agreement. You don't need to file the document with the state, so you can store it with other important business documents.
Step 5: Comply with federal, state, and local
The last step in starting an LLC in Delaware is to comply with all applicable federal, state, and local regulations. Some of these regulations may vary depending on your specific location and the nature of your business, but here isthe most important regulations to keep in mind:
Applying for an EIN
EIN stands for Employer Identification Number, which is a nine-digit number assigned by the Internal Revenue Service (IRS) to identify businesses for tax purposes. Think of it as a Social Security Number for your business.
While this is not required for all LLCs, you will need an EIN if you have multiple owners, plan to have an EIN. hire employees or want to be taxed as a corporation. It is also necessary to open a business bank account.
Sort your tax obligations
Delaware does not have sales tax, but you must complete some other tax requirements as an LLC operating in the state. You have to pay federal and state taxes, as well as self-employment taxes and payroll taxes if you have employees.
Additionally, all LLC of Delaware must pay an annual tax of $ 300 and gross revenue taxes (ranging from 0.0945% to 0.7468%) depending on your type of business. Each member of the LLC must also pay state income tax on their personal tax returns, unless they choose the LLC to be taxed as a corporation.
Meet your employer's obligations
If you hire employees, you are required to meet specific employer requirements, such as reporting new hires, paying social security contributions and unemployment and purchasing workers 'compensation insurance.
In fact, all Delaware employers must register with the Division of Workers' Compensation and purchase accident insurance of work after hiring their first employee, whether the employee is full-time or part-time.