Delaware LLC Filing Fee: Everything You Need to Know
The Delaware LLC filing fee is the registration cost paid to the state to establish a limited liability company (LLC). 3 min read
How to Start an LLC in Delaware
The Delaware LLC filing fee is the registration cost paid to the state to establish a limited liability company (LLC). This business entity provides tax benefits, flexible organization and management, and limited personal liability. The LLC is a relatively new entity that combines elements of partnerships and corporations.
The process for forming a Delaware LLC is easy and affordable. You simply need to fill out the required forms, pay the filing fee of $90, and meet the Division of Corporations' naming and formation requirements. The primary registration form is the Certificate of Formation, which asks for the name of the business, the name and address of the registered agent, and the date the LLC formation should be effective. This form can be sent electronically. You can also mail or fax the certificate with the required cover sheet and either a check or credit card number for the filing fee.
Approval takes about three weeks, but you can receive expedited service at the cost of $100 for same-day filing or $50 for 24-hour filling. Processing takes longer in peak months, including March, June, and December. Before filing your paperwork, check to make sure your preferred LLC name is available.
Although LLC operating agreements are not legally required by the state, multi-member companies should consider having one in place. These agreements are legally recognized as governing documents by the state of Delaware. An operating agreement should include:
- The roles of each member
- Information about voting rights
- Details about LLC management
- The procedure for admitting or removing members
- LLC dissolution procedures
- Agreement amendment procedures
In Delaware, the LLC operating agreement can be oral, written, or even implied by the actions of the company. If your company offers a professional service, you also need to register with the state licensing boards that govern that profession.
An LLC can have any number of members, including other LLCs, corporations, foreign entities, and individuals. You can choose any name that isn't already in use by another Delaware company, as long as it ends with LLC, L.L.C., or Limited Liability Company. A new business can reserve a name with the Division of Corporations for up to 120 days by filling out the required form and paying a filing fee. The form must include your name, address, and dated signature. Before applying for a name reservation, make sure the name you want is available.
The registered agent for an LLC can be either an individual or corporation but must have a permanent Delaware address and be authorized to conduct business there. The registered agent is authorized by the LLC to accept and distribute legal documents on its behalf.
Multi-member LLCs must receive employer identification numbers (EINs) from the IRS. Delaware LLCs are subject to a state Alternative Entity Tax, which must be paid annually by June 1. Failure to pay on time carries a $200 late fee and monthly interest accrual of 1.5 percent on the outstanding tax and penalties. While an annual report is not required, LLCs are subject to an annual Delaware tax of $300.
Delaware LLCs must file Form 1065 with the IRS and detail profit, loss, and credit distribution on Schedule K-1. Those that elect to be taxed as C corporations must file Form 8832 followed by Form 1120; for S corporation tax treatment; LLCs must file Form 1120S along with a profit, loss, and credit report. Sole proprietorship LLCs must report income and expenses related to the business on Schedule C of the owner's individual federal tax return.
Delaware LLC Advantages
Many businesses choose to form LLCs in Delaware because the state has the easiest registration process. The minimal information required means that your personal information won't become public record, as it does in some other states. Delaware also doesn't require businesses to pay taxes on intangible income and assets. Businesses formed in Delaware that do not operate in the state are not subject to income tax.
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