Delaware LLC Filing Requirements: Everything You Need to Know
You will need to know Delaware LLC filing requirements if you plan on forming an LLC within the State of Delaware.3 min read
Delaware LLC Filing Requirements
Taxes for LLCs with Employees
If you intend on hiring employees to work for your LLC, then you will need to pay employer taxes – at the federal and state level. Before you can begin hiring employees, you will need to register your business with the Department of Revenue (DOR) either online or by mail.
Once you’ve registered, you will need to file withholding taxes periodically (either monthly or quarterly). Additionally, you will have to file a reconciliation of your LLC tax withholding on a yearly basis. In order to do this, you will file Form W-3. You’ll also need to register for unemployment insurance through the Delaware Department of Labor, which can be done either online or by mail (Form UC-1). Thereafter, you will need to file Form UC-8 and UC-8A quarterly to report on wages and pay the unemployment insurance taxes.
Gross Receipts Tax
Delaware does not have a sales tax. However, the state does in fact have a gross receipts tax, which is the tax on sellers of products. This tax is based on the seller’s gross revenues. The range for such tax is from .1006% to .7543% depending on the company’s industry.
Registering in Other States
If you plan on conducting business outside the State of Delaware, you might need to register in those states (depending on that respective state’s LLC laws). The rules vary by state, however, the following criteria is generally looked at to determine whether an LLC will need to register in that state:
• If the LLC has a physical location in the state
• If the LLC has employees in that state
• If the LLC is soliciting business in that state, i.e. mailing materials, etc.
In order to register as a foreign business in other states, it generally involves obtaining a certificate of authority by filing for foreign qualification.
Delaware Requirements for Non-U.S. Citizens
If you are a non-U.S. citizen, you can still form a Delaware LLC. Your LLC will be taxed in the U.S. only on income derived from business conducted within the United States, meaning that the U.S will not tax income earned from outside of the U.S. The US-based income will be taxed at a rate of 30%, which will go directly to the Internal Revenue Service (IRS).
At the end of the taxable year, you will need to file Form 1040-NR with the total amount due. If that amount due is less than 30% initially taxed, then the IRS will issue you a refund in the amount that you overpaid. To ensure that you are sending the appropriate amount to the IRS, the LLC must obtain an agent who will act on behalf of the LLC to calculate the amount that is due. Due to the potential burden on ensuring that the appropriate amount is paid, most non-US residents wishing to form a business within the State of Delaware choose to form a corporation. Generally, those non-US residents forming a Delaware LLC do not pay U.S. taxes, as the income derived from the LLC is non-US based income.
Differences Between an LLC and a Corporation
If you are operating an LLC in the State of Delaware, you’ll want to be aware of the differences between operating an LLC as opposed to a corporation. Specifically, owners in an LLC are referred to as members. Members in an LLC have membership interests, whereas owners in a corporation have shareholder stocks. Shareholders in a corporation elect the directors to oversee the corporation’s operations. Those directors also elect officers, i.e. President, Treasurer, Secretary. However, most members in an LLC do not hire a Board of Directors, but rather oversee the operations of the business themselves.
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