Forming a Limited Liability Corporation (LLC) in Delaware is a popular choice among business owners for a variety of reasons, many of which center around Delaware’s business-friendly laws. Understanding the answers to some of the most frequent questions asked by potential LLC owners can make the process of forming and operating this type of entity much easier. To help entrepreneurs and business owners from Chicago and other areas, here are the answers to some of the most common questions about forming and running an LLC in Delaware.

What are the Advantages of Forming an LLC In Delaware?

The most notable benefit to forming an LLC in Delaware is the state’s pro-business environment. Created with businesses in mind, Delaware is one of the nation’s leaders in corporate legislation, so much so that the majority of Fortune 500 companies are incorporated in Delaware. LLCs are also able to take advantage of Delaware’s tax benefits, involving relatively low franchise taxes, high asset protection, and privacy afforded by Delaware’s bank accounts.

Are there Requirements for Establishing an LLC in Delaware?

Yes, anyone who wants to form an LLC in Delaware must name a registered agent for service of process, or someone who is available to receive official documentation if the LLC is sued. Additionally, LLCs must file an initial report with the Delaware Secretary of State and pay an annual franchise tax.

What is the Process for Forming an LLC in Delaware?

Forming an LLC in Delaware requires the potential business owner to choose a unique name, one that has never been used before by another registered LLC, and must end in “Limited Liability Company,” “LLC,” or “L.L.C.” An LLC must also have articles of organization that are filed with the Delaware Secretary of State, and the articles must include the LLC's name, address, type of management, and purpose. Business owners with more specific structure needs for their LLCs can opt to include customized provisions for voting rights, member duties, and more.

What Are the Benefits of Operating an LLC in Delaware?

Aside from the already considerable advantages of tax benefits, asset protection, confidentiality, and business-friendly laws, forming an LLC in Delaware also provides owners with continued liability protection. LLCs are able to protect against any personal liability in the event of a lawsuit, and LLC ownership also affords LLCs the ability to get loans from banks and finance companies under the LLC’s name, as well as the ability to purchase insurance in the LLC’s own name.

What are the Responsibilities of a Delaware LLC?

For a Delaware LLC to remain in good standing, there are certain rules that owners must follow. LLCs must be registered with the Delaware’s Department of the Secretary of State, and must file an annual report and pay an annual franchise tax. LLCs must also observe certain maintenance criteria, such as adhering to Delaware business laws, maintaining legal records, holding meetings, and issuing reports and documents to maintain the LLC’s good standing.

How Can I Find an Experienced Business Lawyer?

With the complexities of forming and running an LLC in Delaware, it can be helpful for business owners to have access to experienced legal counsel. Fortunately, the internet is full of resources designed to connect busy entrepreneurs with skilled attorneys. Consider a service like UpCounsel, which links busy business owners to attorneys with specific expertise. On UpCounsel, you’ll find lawyers who have more than 14 years of experience, and their profiles include ratings and reviews of their recent work.


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