How To Form A Delaware LLC
By Bazal Razzaq
Updated: August 14, 2023, 12:30pm
Editorial Note: We earn a commission if you use the services recommended on this page. Commissions do not affect our opinions or recommendations.
- Pick a name for your Delaware LLC
- Draft a business plan for your LLC
- Hire a registered agent
- Prepare and file a Certificate of Incorporation with the Delaware Secretary of State
- Get an EIN (Federal Employer Identification Number) from the IRS
- Prepare an Operating Agreement
- Final Word
- How To Form An LLC In 50 States
- Frequently Asked Questions (FAQs)
Wondering how to form a Limited Liability Company in the USA’s #1 LLC formation state? We’ve got you sorted! Renowned for its business-friendly laws and a popular state for incorporating companies due to its well-established and flexible corporate legal system, Delaware is the ultimate hub for both beaches and businesses.
Whether you’re choosing to DIY your own Delaware LLC or taking the easy route and choosing a business formation service, our guide will help you every step of the way!
#1 Pick a name for your Delaware LLC
Before filing any important LLC documents, make sure that your chosen name is available and up for use. You can check the official State of Delaware website for business name availability.
When naming your Delaware LLC, it’s important to keep these common points to keep in mind:
- Uniqueness: Your LLC name should be distinct from existing businesses in Delaware.
- Legal Ending: Include “Limited Liability Company,” “LLC,” or “LLC” in your name.
- Restricted Terms: Avoid using restricted terms like “Bank,” “University,” or misleading words.
- Reserved Words: If you’re using certain words like “Attorney” or “Doctor,” remember that they may require formal approval or licensing.
- Misleading Names: Avoid names that could confuse your LLC with a government agency.
- Web Domain: Ensure the domain name is available if you plan to have an online presence.
- Sensitive Words: Some words need approval if related to finance, insurance, etc. Also, avoid using words that are rude, racist, or lewd (according to Delaware’s Secretary of State).
- Name Availability: Check the Delaware Division of Corporations database for name availability.
- Reserved Name: Reserve your chosen name for 120 days by filing a Name Reservation Request.
- Professional Help: Consult legal counsel for accurate name compliance and protection.
In case your chosen LLC name is available but you don’t wish to form your LLC right away, you can reserve the name for four months(120 days) by submitting a Business Name Reservation form. If you’re sending it by mail, you need to download the forms and then post them to,
Delaware Division of Corporations,
401 Federal Street, Suite 4,
Dover, DE 19901.
You also need to include the appropriate cover memo and a filing fee of $75.
#2 Draft a business plan for your LLC
Successful small businesses always have well-thought-out business plans, and Delaware LLCs are no different. A clear and thorough business plan for your LLC should include its name, business address, and main objective and also explain how it works.
It should also include a careful study of the market, a plan for how the organization will be set up, details about the products or services it offers, who the ideal customers are, and strategies for marketing, managing things, and handling money.
A well-drafted business plan also helps you grab the investors’ attention. How? Well, investors like to see a strategic plan as it helps them decide if your LLC can make any profits.
#3 Hire a registered agent
Like all other states in the United States, an LLC in Delaware also needs to assign a registered agent to receive and accept lawsuits and other legal documents on behalf of your business. If your LLC is physically located in Delaware itself, it can even act as its own statutory agent(just another name for a registered agent).
We’re including a list of a very quick and simple summary of all the requirements to be an agent in Delaware:
- Should have a physical street address in Delaware(P.O. boxes aren’t allowed).
- They’re legally required to be at least 18 years of age.
- Can be an individual or business entity.
- Needs to be available during regular business hours to receive important legal, official, and financial documentation and notification. Even if a notice arrives after business hours, the agent must be alert and receptive enough to forward it to the respective LLC within due time.
- If an entity, it should be authorized to conduct business in Delaware.
- The registered agent’s name, address, and contact details should be included in the Certificate of Formation.
The suspected amount is usually between $49 to $300 annually.
#4 Prepare and file a Certificate of Incorporation with the Delaware Secretary of State
The next step in forming Delaware LLC is filing your Certificate of Formation(a different name for your Articles of Organization document). To officially form your LLC in Delaware, you need to submit your document to the Delaware Division of Corporations.
You can either submit your form online or send it by mail to the following address:
Delaware Division of Corporations
401 Federal Street — Suite 4 Dover,
The filing fee is $90.
When you’re filing your Certificate, you’ll need to provide the following details,
- Your LLC’s name and business address
- The name and address of your registered agent.
- The name and signature of the authorized person completing the form
- Cover page
If you’re a Foreign LLC and intend to conduct business in Delaware as well, you’ll need to fill out a Certificate of Registration and submit a fee of $200. Foreign entities also need to provide a Certificate of Existence issued by the state or country of their LLC’s formation. This Certificate should not be over six months old for submitting the completed registration form.
#5 Get an EIN (Federal Employer Identification Number) from the IRS
If your LLC has more than one member/owner, then you need to obtain an EIN from the Internal Revenue Service(IRS). This nine-digit number is used for taxation purposes and can also be required for any of the following activities,
- Hiring employees for your LLC
- Opening a professional business bank account
- Getting funding/business loan
- Conducting business with vendors
- Apply for different business licenses and permits
- Handle and pay your state and federal taxes to the government
That being said, it’s also a good idea for single member LLCs to consider getting an EIN. The application for getting one is pretty fast and simple, and as soon as you hit submit, you’ll get a number for your Delaware LLC. The state will also give a 7-digit number to new businesses, which can be used for state taxes and other LLC stuff.
Also, if you own a single member LLC(SMLLC) and decide not to get an EIN, you’ll have to use your Social Security number on official papers asking for an EIN. Getting an EIN is a good idea to avoid risking your personal details, which adds extra protection.
#6 Prepare an Operating Agreement
Finally, the most underrated step. An ideal LLC, not just in Delaware but in almost all states of the United States, needs to draft a clear-cut, detailed, and reliable Operating Agreement. It’s like a roadmap for your company’s success.
An Operating Agreement is an informative document outlining exactly how you intend to run your LLC. Here’s what you should consider including in your Delaware LLC agreement,
- Categories of Interests: Different groups of members might have varying entitlements concerning the LLC’s operations (such as voting rights).
- Administration: Clarify whether the LLC is overseen by a group, a single member, multiple members, an assigned manager, etc.
- Trust Responsibilities: Obligations based on trust may be automatically assigned unless you indicate any changes or limitations.
- Profits and Sharing: How gains and losses are allocated among the members and other relevant individuals.
- Transferring Ownership: You can decide to explain the regulations and conditions for members wanting to shift their ownership (or exit the LLC altogether).
- Raising Funds and Adding Members: This would detail how the LLC plans to gather new finances and introduce fresh members.
- Termination: The circumstances that would lead to the dissolution of the LLC and the steps involved in the process.
Usually, we encourage creating an operating agreement. Still, Delaware actually happens to be one of the five states that require drafting an agreement for LLCs with more than one member/owner.
It isn’t a requirement for Single Member LLCs or SMLLCs.
Once your Delaware LLC is a registered entity, it opens doors for you to carry out multiple formalities, like,
- Pay an alternative entity tax. Unlike other states, Delaware doesn’t have to maintain an annual report to keep an LLC active. Instead, you may need to pay a gross receipts tax if you sell goods and have employees. This tax might need to be paid every three months.
- Every Delaware LLC needs to pay a $300 state tax every year, whether from another place or within Delaware. You need to pay the tax for the previous year before June 1. If you don’t pay on time, you’ll get a $200 penalty and a 1.5% extra monthly charge on the unpaid tax and penalty.
- Register your LLC with the state’s tax agency to file your taxes correctly.
- Apply for a business credit card.
- Get insurance to protect your business from unexpected troubles.
- You can also protect your business name and logo with a trademark.
- Lastly, get the required permits and licenses to run your LLC legally and cautiously.
If you’re planning to hire employees for your Delaware LLC, you’ll need to do the following,
- Obtain your EIN (Employee Identification Number).
- Ask your employees to fill out the Employee Eligibility Form.
- Set up a process for the collection and payment of taxes.
- Make sure you have workers’ compensation insurance.
- Report to the state about new hires within 20 days of hiring them.
And that’s it! That was all you might need to know before finally forming that LLC in the “very first” and #1 LLC formation state of the United States!
Frequently Asked Questions
Delaware LLCs must file annual reports and pay annual franchise taxes. The report includes updated business information, and the tax is based on your company’s authorized shares.
Yes, every Delaware LLC must appoint a registered agent who will receive legal documents and official correspondence on behalf of the company.
You can file the Certificate of Formation with the Delaware Division of Corporations online or by mail. Include information about your LLC’s name, registered agent, management structure, and other details.
An Operating Agreement outlines your LLC’s internal operations, ownership structure, and management roles. While Delaware doesn’t legally require one, having an Operating Agreement is recommended to prevent disputes and ensure smooth functioning.