Delaware LLC – How to Form an LLC in Delaware

Forming an LLC in Delaware – Overview

To form a Delaware LLC, you’ll need to file a Certificate of Formation with the Delaware Department of State, which costs $90. You can apply online or by mail. The Certificate of Formation is the legal document that officially creates your Delaware limited liability company.  Form an LLC in Delaware with these five steps:

  1. Name your Delaware LLC
  2. Designate a Delaware Registered Agent
  3. Get a Delaware Certificate Of Formation
  4. Make a Delaware LLC Operating Agreement
  5. Apply for an EIN

How to form an LLC in Delaware

This article will walk you through the basics of setting up an LLC in Delaware. First, you’ll choose the name of your new business and appoint an agent. After you have these, you can file the Certificate of Formation in order to register your LLC with the state.

You can then create an operating agreement that will govern the operation of your Delaware LLC. Also, obtain an Employer Identification Number from IRS. Other topics, such as obtaining your business license and registering to pay state taxes, will be covered.

We’ll walk you through each step and show you how the services can cut through red tape so that you can enjoy the fun parts of starting your business.

These steps can be used to form a Delaware domestic LLC. Foreign LLCs, which are those that were formed in another country, will need to follow a different process.

Delaware Business Resources

Step 1: Name your Delaware LLC

Choose a name for your LLC in Delaware. Naming your company can be fun. You might already have a name in mind. You’ll still need to adhere to Delaware’s naming guidelines.

Delaware LLC Name Availability

Name Search Delaware Department of State- Division of Corporations

Name Search

Name Reservation Optional
Suffix: Shall contain “Limited Liability Company”, or the abbreviation L.L.C.” Oder the designation “LLC”.

DC §18-102

Your name must be unique in Delaware. This means that it cannot be used by any other business. It must be distinct from any Delaware company to avoid confusion. Visit our Delaware Business EntitySearch page to find out if your desired Delaware LLC name is available.

Will my filing be rejected due to the name I choose?

Yes, it’s possible, and it can happen.

One of the main reasons LLC applications are denied is because you don’t follow the Delaware naming guidelines. Although you can apply again with a different name (or resubmit), rejections will slow down the process.

Name reservation and formation services are available to help you find the right name for you. This will save you time and money.

Reservation of Business Name

Although it is not necessary, you should consider reserving the name once you have chosen it. This will ensure that no one else uses it before your company is formed. Delaware permits you to reserve names for up to 120-days by filing an Application for Reservation Of Limited Liability Company Name.

Choose a designator

A designator is a group of words or abbreviations which are added to certain business names, such as “limited liability corporation” or “Inc.” Your LLC must include the designations “limited liability company,” “LLC”, or “L.L.C.”

Other Naming Regulations

There are other considerations that you should consider when naming your LLC:

  • Using the term “bank” or any variant thereof is illegal.
  • The name of a manager or member can be used in the business name.
  • Unlike other states, you are allowed to use the following words or their abbreviations in your LLC’s title: “Company,” “Association,” “Club,” and “Foundation,” respectively.

These restrictions should be kept in mind as you create your LLC.

Does your Delaware LLC name have a website domain?

It is important to consider the availability of the LLC name on the internet when choosing a name. A business name that you like and is also available as a URL will give you a website that is easier to find for marketing purposes.

You can also check which social media handles are currently available. Businesses market on platforms such as Facebook, Instagram, and Pinterest. Getting the right social media handles for your online marketing is important.

Register domain name for your Delaware LLC

It’s a good idea to consider whether you can get a matching domain name when creating an LLC name. Your future company’s website will be easy to find online. A strong URL is essential for any business.

Search for trademark registrations

Your Delaware LLC name approval does not mean that you are in good standing. You might already have a trademark for the name you choose.

Trademarks can be registered at both the state and federal levels. To check if your company name has been trademarked at the federal stage, you can visit the U.S. Patent and Trademark Office Website.

Contact the Delaware Division of Corporations (302) 739-3073 to find out if your name has been trademarked at the local level. You can also try searching the name on Google and browsing phone directories looking for similar names. You could also consider hiring a trademark attorney to help you get the details right.

A trademark can be obtained by you. A federal trademark can be too expensive and time-consuming for small businesses. However, a state trademark is easier to use. Although it is only valid within the state, it is less costly and easier to obtain.

Register your state trademark with the State of Delaware Application For Registration of Trademarks or Service Marks.

How to file a DBA in Delaware

You will need a DBA to operate your business in Delaware if you are planning to use a different name than the Delaware LLC’s legal title. An LLC may use a DBA (Doing Business As) name to market new products or stores under a different name.

You will need to fill out the Registration of Trade, Business and Fictitious name Certificate if you are interested in a DBA. It must be notarized and submitted in every county where you intend to do business. This will require a small filing fee.

Step 2: Designate a Delaware Registered Agent

Designate an agent for your Delaware LLC. The primary function of a Delaware registered agent is to receive official state correspondence and legal documents (such as notices of lawsuits), on your behalf.

What happens if my Delaware registered agent isn’t available or isn’t found?

It might seem simple to act as your Delaware registered agent or appoint a friend or family member as your agent. Consider what might happen if the state or a process server is unable or unwilling to locate you or your agent.

If you or your appointee are not in the office (for instance, on vacation, sick, etc.), this can happen when they attempt to reach the agent. This can also occur if the agent leaves or moves and you forget to update the state with your paperwork.

Failure to register an agent can result in Delaware dissolving your LLC and you losing your liability protection, which was most likely the reason you created the LLC.

A process server might not be able to locate you in time to notify you about a lawsuit. This is another scary possibility. A court case against you could be filed without you knowing.

Registered agents must be available during business hours to receive certain notices, such as subpoenas, in person and relay them back to business owners. The agent cannot provide financial or legal advice. A registered agent must:

  • Delaware residents or entities authorized to do business within the state of Delaware
  • A physical address is required in Delaware, which is called the “registered Office”. Boxes are not permitted
  • During normal business hours, be available in person

Delaware, unlike many other states, allows LLCs to register their own agents.

Many business owners believe they should be serving in this role for their company. They also use their primary address as their registered office address. This approach can have unintended consequences such as a process serve to show up at your office with court papers and clients.

Step 3: Get a Delaware Certificate Of Formation

Agency: Delaware Department of State- Division of Corporations
A certificate certifying the formation of a Limited Liability Company
Filing Method Fax or mail
Agency Fee $90 + optional $50 – $1,000 expedite fee
Turnaround: ~3 weeks. For $50 state expedite fee, it takes 24 hours. Same-day service for $100 state fee. 2hrs for $500 state fee expedite fee. 1 hour to pay $1000 state expedite tax.
Delaware Code. Title 6: Commerce and Trade. Chapter 18. Limited Liability Company Act
Notes: Include a cover letter.

Fill out and submit your Certificate of Formation. Once approved, this document is known as the Articles of Organization.

Online filing of your Certificate of Formation can be done with the Delaware Division of Corporations, but not the Delaware Secretary of State. You can also fax or mail your paperwork. At the time of writing, the filing fee is $90.

Many people find filing official documents such as these difficult and intimidating. This is why we are here. Our business formation programs let professionals take care of the filing so it is done right the first time.

What information is required for my Certificate Of Formation?

The Delaware Division of Corporations offers a PDF fillable for the Certificate of Formation on their website. The Delaware Division of Corporations asks that you include the following information.

  • Your LLC’s full name in Delaware
  • Your registered agent’s name and address
  • Signature of the authorized person to sign for the LLC. Below the signature, the name of the authorized person must be written or typed clearly.

You must also include a cover letter from the Division of Corporations. This can be downloaded from their website. The documents can be submitted via their Document Upload Service or post. The filing fee must be paid at the time you file.

How long does it take to process?

The Division of Corporations website does not commit to a specific timeframe for processing your Certificate of Formation. The website states that times may vary depending on the volume of work being done at the time. To get an estimate, you can call them at (302)739-3073 option 2. Online submissions are generally faster than those sent by mail.

Delaware offers several options to expedite your process if you need it urgently. You can get your Certificate of Formation processed within two hours or one hour, depending on your available money. The Division of Corporations website has the most current fee schedule.

Once your Certificate of Formation has been approved, you will receive a stamped “Filed” copy of the submitted document. A certified copy can be requested for a fee.

Modifying the Certificate of Formation

Only one Certification of Formation is required. You only need to file your Certificate of Formation once.

Step 4: Create a Delaware Operating Agreement

It establishes the rules and procedures for the LLC, including how it will be managed, who owns it, what percentage of each member, how profits will be split, and other details.

An operating agreement may allow you to:

  • Clearly indicating each member’s powers and privileges will help to prevent and resolve conflicts between them
  • Customize your business’s procedures and rules to meet your LLC’s needs, expectations, and interests.
  • Define the management structure of your LLC
  • Plan for what to do if a member is incapacitated or leaves.
  • Establish the rules for inviting new members to the company
  • Separate your business and your personal assets to provide additional protection against legal liability.

These are the reasons we consider operating agreements an integral part of LLC formation.

Do I have to sign an operating agreement for a single-member LLC?

You might believe that most of the terms in your operating agreement are meant to prevent disputes among LLC members. However, one is not necessary for a single-member LLC. Your operating agreement may be useful to potential investors and future business partners.

Some banks won’t allow you to open a bank account for your business without one. An operating agreement will outline what happens to the business in case you become disabled or die.

Sometimes, an LLC owner will be taken to court by someone trying to prove that they are one entity. This allows them to pursue the owner’s personal assets. An operating agreement is a way to show the court that the LLC owner and LLC are distinct if that happens.

Step 5: Apply for an EIN

Register with the Federal Government and obtain an EIN (Electronic Tax Identification Number) from the Internal Revenue Service. You will need an EIN (Electronic Tax Identification Number) for tax purposes.

Agency: Internal Revenue Service
Filing Method Mail, phone, or Online.
IRS fee $0
Turnaround: Instantly online or by phone 4 business day by fax. 4-5 weeks by mail
Notes: The IRS website can only be accessed during specific hours. Print your EIN before you close the session. For additional guidance, refer to IRS Publi 1635: Understanding Your.

An EIN can be described as a Social Security number for your company. It allows you to hire employees and apply for a bank account. You can also pay taxes.

Although you can obtain your Delaware LLC’s EIN online, by mail or fax, we can help you avoid having to deal with the IRS. The EIN service eliminates the need to deal with the Internal Revenue Service.

Register with the Delaware Division of Revenue

You must register your Delaware business with the Division of Revenue to apply for a business license.

Delaware LLC – Pros and Cons

Delaware does not have a sales tax if you have ever made any purchases in the state. The state’s reputation as pro-business is due to a number of factors, including lower taxes, less exposure of business owners’ personal information, and business-friendly legislation.

The Court of Chancery is also located in Delaware. This unique 215-year-old court has written most of U.S. corporate case law. Because the Delaware Court of Chancery does not use juries, cases involving business can be resolved much faster than in other states.

We explain this on our Delaware Benefits and Risks Page. However, small businesses outside of Delaware may not be able to reap the same benefits as larger corporations. Delaware is the most popular jurisdiction for publicly traded corporations that are listed on U.S stock exchanges. However, Delaware’s corporate law website states, “for many small business entities, formation in Delaware where the corporation will do most its business may prove more cost-effective.”

Benefits of LLCs in Delaware

A limited liability corporation (LLC), is a legal entity that combines elements of sole proprietorships and corporations. It acts as a corporation and provides limited liability protection for business owners. The LLC owners’ personal assets are protected in the event of a lawsuit or if the business goes into default.

The LLC’s profits, unlike a sole proprietorship, are not subject to tax at the business level before they are distributed to LLC owners (called “members”) This avoids “double taxation”, which is what traditional corporations do. The profits are both taxed at the personal and business levels. Additionally, LLCs require less paperwork but have greater flexibility regarding how they are run.

Delaware LLC Business Banking

After you have obtained an EIN, you can open a bank account for your business. Separate accounts for your business and personal banking are essential for tax planning.

If you are sued for the assets of your LLC and your personal assets, commingling funds can make it more difficult to pay your taxes.

Delaware LLC – FAQs

What is the cost of starting an LLC in Delaware?

To start an LLC in Delaware, there is a $90 state filing fee with the Delaware Department of State LLC.

Is there an annual fee for LLCs in Delaware?

An annual $300 Franchise Tax will be required by LLCs.

How long does it take to create an LLC in Delaware

The state of Delaware usually takes between 2 and 3 weeks to approve an LLC. However, expedited processing can be arranged for an additional fee.

Are you able to be your own registered agent in Delaware?

Anybody can be a registered agent provided they are at minimum 18 years old and live in the state. They also must be available during normal business hours to receive documents.

Do I need a business license if I own an LLC?

Sometimes it is believed that an LLC and a business license are one and the same. However, they are not. The business entity is also known as an LLC. It is the way the business is organized in order to do business. A business license allows you to legally operate.

What is a Foreign Limited Liability Company (FLLC)?

An LLC that is Delaware-based and has a Delaware foreign limited liability company is one that was established in another state but wishes to be physically active in Delaware. Being physically operational means that you have a physical presence such as an office or employee.

Related Posts

Start a Business in Delaware

Get a Business License in  Delaware

Delaware Business Name Search

Delaware LLC Services

Registered Agent in Delaware

Our 2023 List of the Best LLC Services for Any State

If you need to form a limited liability company in any of the 50 states, visit our page where we list the 12 best LLC formation services for 2023. Any of these top services are good choices but we continue to recommend ZenBusiness, Northwest Registered Agent, and Incfile.  


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