Understanding the Benefits of Forming a Delaware LLC
Forming a limited liability company (LLC) is one of the most popular business structures for entrepreneurs today3 min read
Forming a limited liability company (LLC) is one of the most popular business structures for entrepreneurs today. A Delaware LLC is an LLC formed under Delaware law and provides many advantages that other LLCs in other states are simply unable to provide. Understanding why a Delaware LLC may be the best option for your LLC and what the primary advantages are can help you make an informed decision during your business formation.
Incorporating in Delaware has long been a preferred choice for business owners to form their LLC, as many of the most well-known US companies are formed there. Among major benefits are Delaware’s unique laws and advantageous member/owner rights that are a bit more favorable than what is available in other states. For entrepreneurs in Chicago and other parts of the US, working with lawyers who understand local regulations as well as Delaware’s laws can help provide the best possible foundation at formation.
Why Form a Delaware LLC?
There are a lot of reasons why Delaware LLCs are popular – and many of them come down to the advantages that Delaware LLCs offer. Delaware offers unique and favorable corporation and LLC laws, experienced judges, and pro-business courts that have been setting precedent for more than a century. Knowing what these advantages are and how they apply to your LLC’s formation can help you make an informed decision as to whether forming a Delaware LLC is right for you.
1. Favorable Tax Options
For starters, Delaware has some of the lowest LLC formation fees in the country, making it a popular choice among entrepreneurs. In addition, Delaware LLCs are not required to pay state taxes. Delaware also does not require LLCs to conduct audits or minimum filing fees. This helps to keep LLC expenses low and appeals to the business owners who are looking to maximize the laws available to them in order to save on taxes.
2. Favorable Ownership and Control Structure
Delaware is also very flexible with the ownership and control structures allowed for LLCs. There are no restrictions on the maximum number of owners in an LLC and the owners can be foreign entities, such as another LLC. Also, each owner of the company has a say in how the business should be run. This flexible ownership and control structure helps to ensure that the company is run in an efficient and effective way.
3. Asset Protection
The third benefit of forming a Delaware LLC is that it offers protection of personal assets from business debt. In the traditional general partnership and limited partnership, the business owners can be held personally liable for business debt; this is not so with an LLC. Unlike a traditional corporation, LLCs protect members from personal liability, and the personal assets of each member are protected from business debts and financial losses incurred by the business.
Working with a Legal Team in Your State and Delaware
When business owners in Chicago or anywhere in the country consider forming a Delaware LLC, they should also consider the value of working with a legal team who understands both local licensing regulations as well as Delaware law. UpCounsel, for instance, helps entrepreneurs access high-quality attorneys on demand, connecting clients with experienced business lawyers who can help with the specific demands of a Delaware LLC formation.
From small business attorneys with an average of 14 years of experience to Fortune 1000 companies, UpCousel’s network of experienced lawyers provide focused, cost-effective legal services. Clients can also view profiles of each lawyer to review ratings and review ratings and reviews of recent work, making it easier to determine the best solution for their business formation.