Creating a Limited Liability Company (LLC) in Delaware is a significant step for entrepreneurs, but understanding the financial obligations involved is crucial.
From mandatory fees to optional services, being aware of the costs associated with forming an LLC is essential for effective financial planning.
In this guide, we’ll provide a comprehensive overview of the various expenses you’ll encounter while forming an LLC in the First State.
Delaware LLC Formation Fee
Commencing the process of forming an LLC in Delaware involves filing the Certificate of Formation, a pivotal step that legally establishes your business entity. The Delaware LLC formation fee for this critical filing is $90, paid to the Delaware Division of Corporations. This fee is fundamental as it lays the foundation for your LLC’s operations and protections.
Delaware Franchise Tax
Delaware requires all LLCs to pay an annual franchise tax. This tax is based on your business’s authorized shares or the assumed par value capital. The minimum tax is $300. Filing and paying the franchise tax is an essential ongoing obligation for maintaining your LLC’s active status. More information about Delaware’s franchise tax can be found on the Delaware Division of Corporations website.
Delaware Registered Agent Fee
Selecting a registered agent is a crucial aspect of forming an LLC in Delaware. A registered agent accepts legal documents on behalf of your business. While you can fulfill this role yourself, hiring a professional registered agent service provides reliability and privacy. Registered agent service fees vary, ranging from around $100 to $300 annually.
Delaware State Business License Fee
Delaware does not impose a general state business license requirement. However, some industries and activities may necessitate specific licenses or permits. These costs vary based on the nature of your business operations.
Delaware Professional Licensing Fees
Certain professions in Delaware require professional licenses, such as nursing or architecture. These licenses often come with examination fees and can vary based on the industry and specific requirements. For instance, obtaining a Certified Public Accountant’s License involves application fees and exam costs, each varying in amount.
Local Business License Fees in Delaware
Certain cities and municipalities in Delaware may require local business licenses. The fees for these licenses can vary significantly depending on your business type and location. It’s essential to research the specific requirements of your local jurisdiction to determine the fees applicable to your LLC.
Optional LLC Fees in Delaware
Beyond the mandatory expenses, there are additional fees to consider:
- Name Reservation: Reserving your LLC’s name for a specific duration costs $75. This step ensures that your chosen name remains available while you complete other necessary steps.
- Fictitious Name: Registering a fictitious name (also known as a DBA) costs $25. If you intend to operate under a name different from your LLC’s legal name, this is a necessary step.
Business Insurance Premiums
Obtaining business insurance is a crucial consideration for your LLC. The costs depend on factors such as your business size, industry, and the extent of coverage you require. Business insurance costs can range from a few hundred to several thousand dollars annually.
Cost to Register a Foreign LLC in Delaware
If your LLC originates from another jurisdiction but plans to conduct business in Delaware, you must register as a foreign LLC. The registration fee for a foreign LLC is $200. This process ensures that your LLC is officially recognized and compliant with Delaware regulations.
Forming an LLC in Delaware involves navigating a range of costs, from filing fees and franchise taxes to optional services like registered agents and insurance coverage. By understanding these expenses and utilizing resources like the Delaware Division of Corporations website, you can make well-informed financial decisions while establishing your LLC in the business-friendly environment of the First State.
Brian Wilson is the content manager and founder of LLC Radar.
Brian grew up in North Texas, just outside of Dallas, and has a bachelor’s degree in business journalism from Southern Methodist University. Since graduating from SMU, Brian has gained over 10 years of experience in business writing for several online publications.
Brian resides in Plano, Texas and he can be reached by email: email@example.com