Delaware LLC Cost: Everything You Need to Know
When it comes to Delaware LLC cost, it usually costs around $90 to establish your LLC. 3 min read
2. Filing Instructions
3. Name Reservation
4. Additional Fees
5. Delaware LLC Perks
Delaware LLC Cost
When it comes to Delaware LLC cost, it usually costs around $90 to establish your LLC. With that, business owners often overlook a Delaware LLC as opposed to its older sibling, the corporation.
Delaware did not allow LLC creation until 1991, when the state passed the Liability Company Act. Since then, Delaware extended the same tax advantages and protections to LLCs that a corporation would offer. Overall, LLC creating an LLC is an easier process for small businesses than corporate registration.
States laws vary, but you may also have to pay licensing fees in addition to registration fees. Failure to apply for the appropriate business license comes with a $200 fine. For Delaware, the fee structure for registering an LLC is available on the online Divisions of Corporations.
First, you must create your LLC from a document called the Certificate of Formation. You would file the document with the Division of Corporations. A Certificate of Formation should have the following information:
- LLC Name
- Name of Registered Agent and Agent Address
- Dissolution Date (Write “perpetual” if you want your LLC to exist permanently.)
- Formation Date
- Authorization Signature from Creator
- Any Addition Other Members My Wish to Add
Once completed, mail or fax the certificate to the Divisions of Corporations. From there, the filing process may take around three weeks, or you may pay additional fees to expedite the process. The following is the added fee structure to speed up the process:
- $50 Processing within 24 Hours
- $100 Same-Day Processing
- $500 Two-Hour Service
- $1,000 One-Hour Service
Reserving a name is not mandatory, but it protects your name until you complete the registration process. To reserve the name, you must pay a filing fee of $75, and the name will be on hold for 120 days. It is worth noting that you must pay the state a $200 fee if you decide to change the name after registration completion.
In addition, you must pay a $50 fee to get a certified copy of any documents from the Division of Corporations. Further, the Division of Revenue mandates that all LLCs in Delaware submit a Combined Registration Application (CRA), but this requirement only pertains to businesses that have employees.
The CRA contains information needed to be registered with the following departments:
- Division of Revenue
- Delaware Office of Workers Compensation
- Delaware Division of Unemployment
The CRA can be downloaded from the state website or submitted online. Fee schedules vary based on the entity and industry, but charges stretch from $75 to $100,000.
Delaware LLC Perks
The good news is that Delaware only requires a small amount of documentation, which makes it an ideal choice for business owners. In addition, LLCs keep your personal information and identity secure, and none of your personal information is a matter of public record.
Delaware is the most-friendly state in the United States, and it is often mistakenly referred to as a tax haven. Delaware is known for maintaining a positive image to the business community nationally and offers benefits and advantages that other states will not. For instance, Delaware does not tax tangible income in the form of trademark leases or patents, making the state an ideal option for holding companies that hold such assets.
Moreover, you are not required to pay state income taxes, so long as the LLC does not conduct business in the state. Delaware also provides you with a range of flexible tax options. You may choose to be taxed in the following ways:
- S or C Corporation
- Pass-Through Tax Entity
A corporate registration in Delaware means that you would fall under C classification. The C structure is not ideal choice for most small business owners because it means your business would be taxed twice, paying corporate taxes in addition to personal taxes. With that, you may still choose between an S or C classification.
On the other hand, a Delaware LLC permits pass-through taxation, where profits and losses pass from the LLC to each member for them to file on their personal tax returns. Therefore, they would only pay personal taxes on any profits from the LLC. An S classification also provides the same pass-through tax method.
To find out the Delaware LLC cost for your business, submit your legal inquiry to our UpCounsel marketplace. UpCounsel retains some of the best lawyers in the county to help you in all matters pertaining to LLC costs and registration, and the various ways you can take advantage of Delaware’s lucrative business laws. Also, our lawyers will help you maintain an LLC and plan for tax season and other costs associated with your business endeavors.