Delaware LLC Expedite: Everything You Need to Know
The Delaware LLC expedite filing option allows you to get your incorporation application processed in as little as one hour or as much as 24 hours.4 min read
2. Delaware LLC Advantages
3. Steps in Forming a Delaware LLC
4. Electing the S-Corp Designation
5. Delaware LLC Taxation
6. Incorporating in Delaware
Updated November 26, 2020:
The Delaware LLC expedite filing option allows you to get your incorporation application processed in as little as one hour or as much as 24 hours depending on which option you select.
Delaware LLC Overview
A Delaware LLC is among the most popular business structures in the world. Delaware is considered as the best state in the U.S. for incorporating a limited liability company (LLC) or a corporation. To form a Delaware LLC, you must file a certificate of formation with the secretary of state and pay the prescribed filing fee. You must also write an operating agreement and set out the ownership rights and management structure.
Delaware LLC Advantages
Court of Chancery
Delaware has a special court called the Court of Chancery specifically dedicated to addressing business litigation. Its long existence of over 200 years has given it good authority in business law, and courts in other states also look to its past decisions for precedence.
No Corporate Taxation
Delaware does not tax LLCs separately. Company profits and losses pass through to the members, who file individual tax returns. As such, there is no issue of double taxation.
Ease of Management
Delaware LLCs have a simple business structure and fewer formalities. You need not have a board of directors or convene annual shareholder meetings. This also translates into cost savings since you don't have to employ as many accountants and tax experts as you would otherwise.
No Annual Reporting
A Delaware LLC is not required to file annual reports. It's among the least taxed business entity in the United States.
Steps in Forming a Delaware LLC
Choose Your Name
- Choose a name for your company. Conduct a name search to ensure that the name is not the same as or similar to an existing business registered in the state.
- If you are not filing your certificate of formation immediately, you may want to reserve the name.
- Delaware allows for name reservation for a period of 120 days.
Certificate of Formation
- You must submit the certificate of formation to the Delaware Division of Corporations along with a filing fee of $90.
- The certificate of formation must include the name and address of your registered agent.
- You cannot file the certificate of formation online. Instead, you must send it by mail or fax or submit it in person.
It usually takes about three weeks to process the certificate of formation, but you can also choose to have expedited processing for an additional fee.
Delaware allows the following expedited filing options:
- Same-day processing for $100.
- 24-hour processing for $50.
- Two-hour processing for $500.
- One-hour processing for $1,000.
- Before filing the certificate of formation, you must assign a registered agent to receive service of process and other legal documents for the company.
- The agent must either be a resident of Delaware or a domestic business entity. If it's a foreign business entity, it must have a local office in the state.
LLC Operating Agreement
The members of a Delaware LLC must prepare an operating agreement to set out the terms of ownership and the process of operation.
The document must include the following information, among others:
- Ownership percentage of members.
- Members' rights and responsibilities.
- Members' share in company profits and losses.
- Voting rights of members and the voting rules.
- Whether the company will be member-managed or manager-managed.
- Process for amending the existing operating agreement.
Electing the S-Corp Designation
- S-corp is a special tax designation given by the IRS.
- A Delaware LLC can elect to file its taxes as an S-Corp instead of a regular LLC.
- All the members of a regular Delaware LLC are taxed on all the income they receive from the company. However, in the case of an S-corp, member-employees are taxed only on their wages.
Delaware LLC Taxation
Although Delaware LLCs are not required to file an annual report, you must pay a tax of $300 every year on or before June 1.
Incorporating in Delaware
- To create a Delaware corporation, you are required to file a certificate of incorporation with the secretary of state.
- The corporation comes into existence from the effective date specified in the certificate of incorporation and continues to exist until it is terminated according to the applicable law.
- The filing fee for a certificate of incorporation depends upon the authorized share capital of the corporation. You must pay a minimum filing fee of $89 for a single page, and each additional page costs $9.
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