Start an LLC in Delaware with Inc Authority for Free
With 30+ years of experience and 250k successful businesses formed, Inc Authority is the absolute best choice for starting your new LLC in Delaware.The best part is that its business formation services are completely free, no hidden charges.
1 Year Registered Agent Service Free
Free preparation, review, and filing of your business formation documents with the state authorities.
Complimentary registered agent services with a local Delaware registered agent for one year.
Free S-Corp election services to convert your Limited Liability Company to an S-Corporation.
Things to Know Before Starting an LLC in Delaware
The Delaware Division of Corporations charges different fees for various LLC-related services. These will add up to your cost of forming a Delaware LLC, so you must be aware of these.
Let’s discuss some of the important requirements briefly.
- The state charges $110 filing fees for accepting filled-out applications or Certificates of Formation for an LLC.
- You can get expedited processing services at $50 for 24-hour processing and $100 for same-day processing of applications.
- Once processed, you’ll get a filed copy of your application, and requesting a certified copy will cost an extra $50.
- All LLCs in Delaware need to pay a $300 annual tax, called a Franchise Tax, which is payable by the first of June of each year.
Apart from this, you must follow Delaware law and meet all compliance requirements to stay in good standing with the State. This mainly involves paying taxes on time, as there is no requirement of filing annual reports.
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How to Form an LLC in Delaware
Starting an LLC in Delaware is a straightforward process. But it’s recommended that you know all the important steps so you don’t miss anything important.
Here is a step-by-step guide to starting an LLC in Delaware.
Choose a Name for Your Business
Your official business name represents your business, so choose one carefully. Make sure it’s unique, easy to spell, relevant, and easy to remember. Also, make sure that it follows the Delaware naming guidelines for LLCs.
This may require adding words like “LLC” or “limited” to your LLC name, which may make it longer. To ensure that your chosen business name is not in use by any other business, you will need to thoroughly search the state database.
Reserve Your Name and Secure a Domain
If you anticipate delays in submitting your LLC application, it’s a good idea to reserve your business name. In Delaware, you have the option to reserve a business name for up to 120 days by paying a small filing fee of $75.
This is in line with what you’ll get in most states. Next, find a matching domain name and get it for your business before someone else snatches it up. This is important as it will help customers easily find your business online.
Appoint a Delaware Registered Agent
Unlike many other states, Delaware necessitates the appointment of a registered agent for the service of process. Whether you want to start a business or reserve a name, you will need a local resident agent to represent your business.
The registered agent will also be responsible for receiving all legal correspondence on behalf of your business and notifying you in time. The registered agent can be an individual or a business entity with a local address.
Create a Delaware LLC Operating Agreement
An operating agreement is a document that contains the rules of governance for a Limited Liability Company. This includes guidelines for how day-to-day decisions will be made and how conflicts will be resolved among LLC members.
While you’re not legally required to create an LLC operating agreement, it’s still recommended that you draft one in writing. This will make managing your Delaware LLC easier and will help streamline decision-making.
File Your Delaware Certificate of Formation
To officially register your LLC with the state you need to file Articles of Organization (called Certificate of Formation in Delaware) with the concerned authorities. In this case, this would be the Delaware Secretary of State.
You can fill out the form available on the official website and either upload it online or send it via mail. It will cost you a $110 state filing fee to submit the application and $50 or $100 extra for 24-hour and same-day services, respectively.
Get a Federal Employer Identification Number
An EIN, aka Tax ID, is the number through which the Internal Revenue Service identifies a business for tax purposes and other reasons. You can think of it as a social security number but for a business instead of an individual.
This is an important identification number that lends credibility to a business. So, get an EIN for your LLC in Delaware as it will be useful for various purposes, such as opening a business bank account or paying employee taxes.
Open a Business Bank Account
Every smart entrepreneur knows the importance of keeping business finances separate from their personal finances. That’s why it’s important to open a separate bank account for your Limited Liability Company in Delaware.
You should consider various options to find a bank that offers the best services and rates for a new business. Also, consider online and hybrid banking options as they offer more flexibility, which is great for small businesses like yours.
Get Business Licenses and Permits
To officially start operating your LLC in Delaware, you will need several licenses and permits, based on your type of business and locality. You may need such permits at federal, state, and local levels, so find out the requirements.
Some businesses may just need a general Delaware business license while others may require special industry-specific licenses. If you plan on running a restaurant, for example, you may need food, liquor, and health permits for it.
Choose Your Tax Structure
One of the benefits of choosing an LLC is that it offers flexibility on how you want the business to be taxed. A single-member LLC is treated as a Sole Proprietorship by default and a multi-member LLC is treated as a Partnership.
This means that it is considered a pass-through entity and does not pay corporate taxes. As such, if you want a different tax structure, you can choose to be taxed as a Corporation or fill out Form 2553 to get the S-Corp tax status.
File for a DBA (Optional)
Delaware LLCs are required to follow certain rules when naming an LLC. You are, for example, required to add words like “LLC” or “limited” to your LLC name, which can cause your business name to get longer and less marketable.
If you want to run your business under a shorter, more memorable name, you can file for a DBA (doing business as). This allows you to register a fictitious or assumed name of your choosing and run your business under this name.
Get a Website (Optional)
Forming a Delaware Limited Liability Company is easy. What’s tough is getting those initial customers and letting your target audience know that your business exists. Having a website plays a crucial role in achieving this.
A business website is an organic way of letting your prospects know about your business and the products or services it offers. Make sure you get professional web design and marketing services to create a user-friendly website.
Stay in Good Standing with the State
Lastly, you should follow all the rules and regulations laid down by the state government and the Delaware Secretary of State. This will ensure that you remain in good standing with the state and retain your Delware LLC status.
This typically requires paying your annual taxes on time. Make sure you find out all other requirements or hire professional legal services to help you stay compliant. There is no annual report requirement for LLCs in Delaware.
Why Should You Outsource LLC Formation Services?
For a new entrepreneur, starting a business can be a time-consuming and overwhelming process that requires too many documents and legal hassles. Outsourcing the process to a professional makes things simpler for you. Here’s why.
It’s Convenient
The biggest advantage of outsourcing to a professional is that you reduce your burden and let them handle the tedious processes and complex forms and applications. It’s simply convenient and makes things much easier for you.
It’s Error-Free
When filling out long and tedious applications, the chances of making a mistake are high, especially for a beginner. Letting experts take care of the process ensures that there are no mistakes. This ensures your application gets approved.
It’s Quicker
As a new entrepreneur, you may have to spend hours or even days going through all the paperwork and ensuring everything is ready to go. Experts can complete the entire process within the same day or at least within 24 hours, which is still fast.
Benefits of Starting an LLC in Delaware
Of all the business entities, an LLC is the preferred choice for small and mid-sized businesses. After all, it offers the best of both worlds—the flexibility of a Sole Proprietorship and the liability protection of a Corporation.
Let’s discuss some of the key benefits of forming an LLC.
Personal Liability Protection
Just like a C-Corp, an LLC also protects its members from legal threats in case the business doesn’t do well. Though a pass-through entity, an LLC still is responsible for its own debts and liabilities and its members are not liable for these.
This means that in case the business fails to pay off its debts its assets can be seized but the LLC members will be protected and their personal assets will be safe. The same is the case if the LLC gets sued or completely dissolves.
Flexible Tax Structure
An LLC can choose to be taxed as a Sole Proprietorship, Partnership, Corporation, or S-Corporation. This means that it has the flexibility to choose any of the available options for tax purposes based on what serves its needs best.
A new business can start with the default tax structure of pass-through taxation and if the business needs change or the business grows then it can consider other options. You can opt for a S-Corp status, for example, to get tax advantages.
Cheap to Form and Run
Delaware LLCs are quite affordable as they don’t require a high initial investment or high ongoing maintenance costs. In fact, you don’t even need to file an annual report for your business or pay the accompanying fee that most states charge.
Delaware charges $110 for forming an LLC and a flat fee of $300 as an annual tax for all LLCs formed within the state. As for a relative comparison, forming and running an LLC is cheaper than running a Corporation in most states.
Less Paperwork
Compared to more formal business entities like Corporations, LLCs require less paperwork and regulatory hassles to form and run. The entire process for forming a Delaware LLC is simpler and requires fewer steps.
There are no annual report requirements for Delaware LLCs and even an operating agreement is not legally required, though recommended. Overall, running your day-to-day business as an LLC is simply more convenient and hassle-free.
Ease of Management
Adding to the point above, managing an LLC is also much simpler than managing a Corporation. The latter requires appointing directors, managers, and officers, and following a lot of other strict management procedures.
Corporations need to follow several regulatory guidelines, such as holding shareholders meetings and taking minutes, which LLCs are not required to do. This makes forming and running an LLC in Delaware extremely easy for beginners.
Ownership Flexibility
Some business entities like Partnerships or S-Corps have limitations on who can own the business and how many owners there can be. Limited Liability Companies in Delaware or any other state offer a lot more flexibility on this front.
LLCs don’t limit the number of members. You can form a single-member LLC or a multi-member LLC with as many owners as you want. LLC members can be individuals or organizations, with very few exceptions and limitations.
Ability to Hold Assets
A Limited Liability Company is a legal entity that’s separate from its owners for all financial and legal purposes. For tax purposes, though, it is considered as a pass-through entity and the business profits pass directly to the owners.
This means that an LLC in Delaware can buy and hold assets, such as property, equipment, or intellectual property in its own name. This is a big advantage as it helps protect the owners from business debts and liabilities.
Ability to Enter into Contracts
An LLC is also eligible to enter into contracts in its own name. This means that LLC members don’t need to sign contracts or enter into legal agreements in their own names. This is another way in which an LLC keeps them protected.
This lends more credibility to the business and investors will prefer entering into contracts with a business rather than an individual. This makes it easy to get business funding and find reliable vendors and other business stakeholders.
Inc Authority Delware LLC Formation Services: Free + Paid Plans
Inc Authority is well known for its free business formation services but few know that it offers paid business service bundles as well. These include various add-on services and features to help small businesses succeed.
In this section, we’ll cover all the three plans it offers.
Free
Here are the features you’ll get with the free business formation plan:
- Name check: You’ll get a free tool to search for your chosen business name and ensure that it’s available for use within the state of Delaware.
- 1-year registered agent services: Inc Authority will connect you with a local Delaware registered agent and you can get their services for 1 year for free.
- Online document storage: With your Inc Authority account, you’ll get access to an online dashboard where you can store your business documents.
- Tax planning consultation: A tax expert will provide you with a brief consultation on how to best manage your taxes and get the most tax advantages.
- LLC formation: A team of experts will review and file your Certificate of Formation and ensure that your application gets approved in a timely manner.
- S-Corp election and filing: If you want to convert your LLC to an S-Corp, Inc Authority will help you with the application and filling out Form 2553.
- Business funding analysis: An expert will assess your short-term business funding needs and provide options for various sources of funding.
The free plan has everything you’ll need to start an LLC in Delaware from scratch. But if you want more add-on services, consider the following two paid plans.
Price: Free
Starter
Here are the additional services you’ll get with this plan:
- LLC operating agreement: You will get expert guidance and a template to help you prepare a comprehensive LLC operating agreement for your business.
- Tax ID/EIN: You’ll get expert assistance while filing your EIN application, including review, preparation, and filing of the documents and quick service.
- Corporate forms and documents package: With this package, you’ll get tons of templates for preparing various types of business documents and forms.
- Compliance notifications: The team at Inc Authority will inform you of all upcoming deadlines and legal requirements for your Delaware LLC.
- Detailed tax consultation: Unlike the brief consultation offered in the free plan, this will be a more detailed consultation with a tax professional.
- Web domain + 5 business email addresses: You will get a domain name for your website, matching your business name, and business email addresses.
Price: Custom
Fasttrack
Here are the additional services you’ll get with this plan:
- Customer success advisor: You will be assigned a dedicated customer success advisor who will guide you on how to best use Inc Authority’s services. You can clear any questions you have about your account and get a quick response.
- Private banking expert: A private banking specialist will be at your disposal to help you with your business banking needs. From giving you banking advice to helping you choose the right bank, they will help you with it all.
- Personalized business advisory: With this plan, you will also get access to a variety of experts in various fields who will help you start and grow your business. You will get personalized advice on how to launch a successful business.
- Expedited preparation & filing: The customers on the Fasttrack plan are treated with the utmost priority, so your application will go right to the top of the pile. You can expect your application to be processed and filed within the same day.
This plan is perfect for you if you don’t mind paying for premium, personalized services and getting your business started quickly by filing the application on the same day. But if you simply need help filing the application for an LLC, then the free plan will suffice.
Why Choose Inc Authority to Form an LLC in Delaware
While there are many benefits to outsourcing LLC formation to a professional, here’s what Inc Authority specifically brings to the table to help small business owners.
Free Service
Inc Authority offers 100% free business formation services, while many competitors charge hundreds of dollars for the same. There are no service charges and no hidden fees whatsoever.
Unmatched Expertise
The team at Inc Authority comprises experts from various business fields, such as banking, tax, legal, and business funding, who can help you succeed in your entrepreneurial journey.
Convenience
Inc Authority’s team will handle all the paperwork and regulatory hassle on behalf of your business and you’ll get a seamless, stress-free experience when forming your LLC in Delaware.
FAQ
To start an LLC in Delaware yourself, you simply need to fill out your application and pay a one-time state filing fee of $110. However, many new entrepreneurs find the process tedious and often enlist the services of an agency or professional.
This could cost up to a few hundred dollars, depending on the agency. However, if you choose to work with a free LLC formation service provider like Inc Authority, you can save on this cost. You’ll only need to pay if you choose to get some add-on services as well.
Please note that you’ll also need to get some licenses and permits for your business. Factor in the costs of getting these licenses in your total costs as well, before you decide to start an LLC in Delaware.
While an LLC doesn’t need to pay state income taxes, which many states charge as a percentage of total profits, it still needs to pay an annual business entity tax.
Any domestic or foreign LLC in Delaware must pay a fixed annual tax of $300. You need to pay this before the first June of every year. If not paid by then, you will incur an additional penalty of $200.
This is better than paying a percentage of your total profits as taxes and is perfect for growing businesses as the tax amount remains fixed.
LLCs also pay sales tax and LLC members need to pay income tax on their personal incomes.
Here are some of the key benefits of forming a Limited Liability Company:
- Personal liability protection: LLC members are not personally liable for the LLC’s debts and their personal assets are protected in case the company assets are foreclosed.
- Flexible tax structure: A multi-member member can choose to be treated as a Partnership, a Corporation, or an S-Corporation for tax purposes. Each offers its own advantages and disadvantages.
- Cheap to form and run: Forming an LLC in Delaware or any other state typically requires paying a one-time filing fee, which is minimal in most cases. The ongoing costs of running an LLC are also low.
- Less paperwork: Forming an LLC requires fewer steps and less paperwork than forming a more formal entity like a Corporation. Just filing a Certificate of Organization with the Secretary of State is enough.
- Ease of management: Unlike a Corporation, which has strict rules of management, LLCs can make their own rules that all members agree upon and lay down in an LLC operating agreement.
- Ownership flexibility: Unlike S-Corporations, LLCs don’t have an upper cap on how many members they can have. Non-residents and several organizations are also allowed to be members of an LLC.
- Ability to hold assets: An LLC, though not a formal entity like a C-Corp, still has the ability to hold assets. This makes it easy to keep the members’ personal assets separate from the business assets and property.
- Ability to enter into contracts: A Limited Liability Company can enter into legal contracts with vendors, investors, and other stakeholders in its own name. This also helps protect the owners in case of legal disputes.
If you’re planning on opening an LLC in Delaware, then you need not worry as it’s a great choice for most small and mid-sized businesses.
Here are all the steps you need to take to form an LLC in Delaware:
- Choose a name for your business: Select a unique and easy-to-remember name that effectively represents your business. Make sure you follow the naming conventions of the state of Delaware.
- Reserve your name and secure a domain: In case there’s a delay in registering your LLC in Delaware, you can always reserve your chosen name. You need to pay a filing fee of $75 to reserve it for 120 days.
- Appoint a Delaware registered agent: Hire a resident agent with a physical address in the state of Delaware. Or your can choose to be your own registered agent if you are ready for the responsibility.
- Create a Delaware LLC operating agreement: Though it’s not mandated by the state of Delaware, we still recommend that you create an operating agreement. This will enable the smooth functioning of your new business.
- File your Delaware Certificate of Formation: Fill out the form and file your LLC application (called Certificate of Formation in Delaware) with the Secretary of State’s office to get your LLC registered.
- Get a federal Employer Identification Number: Apply for an EIN by filling out and filing the application with the federal government. This is important because the Internal Revenue Service uses this to identify your business.
- Open a business bank account: Every business must have a separate bank account in its own name, so get one for your new business. This will ensure that your personal finances remain separate from business finances.
- Get business licenses and permits: Your new LLC in Delaware may require multiple permits before it can conduct business. These may include federal, state, and local licenses, so find out the requirements and obtain these.
- Choose your tax structure: If you have a multi-member LLC, you can choose if you want to be taxed as a Partnership, S-Corp, or C-Corp. Each has its own set of pros and cons, so choose carefully depending on your needs.
- File for a DBA: If you think your official business name is too long or unmarketable, then you can choose an assumed name by filing for a DBA. Opt for a short and memorable name to market your business.
- Get a website: Hire a professional to create a user-friendly and SEO-friendly website for your new business. As a small business owner, this is the best investment you can make to generate business leads organically.
- Stay in good standing with the state: Follow all the legal guidelines and regulations at both federal and state levels. Pay your taxes on time and ensure you stay in good standing with the state to maintain your LLC status.
Follow these steps for forming your LLC in Delaware and get started on the right foot.
It typically takes 2-3 weeks to get your application processed and receive your Certificate of Formation for an LLC, if you file online. Filing by mail would take 3-4 weeks, in general, as it takes time for your application to reach the authorities.
If you want to get your application processed faster, you can opt for expedited processing options that the Delaware Division of Corporations provides. 24-hour expedited processing costs $50 and same-day processing costs $100 extra on top of your filing fee.
Form a Delaware LLC for Free with Inc Authority
Inc Authority is your best option to quickly and successfully start an LLC in Delaware, that too without paying any service charges or exorbitant fees. Use this free service and start your Delaware LLC today.
$0 + State Filing Fees