The Complete Guide to Setting Up a Business in Delaware

Forming an LLC in Delaware

Forming your Delaware LLC with our team is fast, affordable, and designed to streamline the entire process of starting your business. With same-day LLC filing, we prepare and submit your Certificate of Formation to the Delaware Division of Corporations within 24 hours of receiving your completed information. Our base package starts at $49 (plus state fees) and includes everything you need to launch your company: a verified Delaware business address, name availability search, registered agent service, operating agreement, and digital mail scanning for up to five business mail items per year (excluding junk mail and registered agent correspondence).

We also assist both U.S. and international entrepreneurs in obtaining an Employer Identification Number (EIN) and opening a U.S. business bank account at no additional cost. For clients who do not have a Social Security Number, we submit the EIN application by fax to help reduce IRS processing delays and keep your Delaware formation on track.

What sets our service apart is our attorney-led approach focused on accuracy, clarity, and support. We offer transparent pricing with no hidden fees or unnecessary upsells. Whether you are forming a tech startup with investors in mind, creating a holding company for asset protection, or building a remote business that needs a reputable legal home base, LLC Attorney gives you the trusted legal foundation to launch your Delaware company with confidence.

What is an LLC?

A Limited Liability Company (LLC) is a flexible and widely used business structure in Delaware that combines the personal asset protection of a corporation with the simplicity and tax advantages of a sole proprietorship or partnership. It is an ideal option for entrepreneurs who want legal separation from their business while maintaining control over how the company is managed and taxed.

Forming an LLC in Delaware creates a separate legal entity, which means the business, not the individual owner, is responsible for its debts and liabilities. In most situations, this protects your personal assets, such as your home, vehicle, or savings, if the business is sued or faces financial trouble. Delaware allows both single-member and multi-member LLCs, and income typically passes through to the owners' personal tax returns, avoiding double taxation.

Delaware's strong legal framework, respected court system, and nationwide reputation make it a top choice for forming an LLC, whether you are a solo entrepreneur, forming a remote business, or planning to raise capital.

Reasons to Form an LLC

LLCs, or limited liability companies, are a specific business structure in the United States designed for small businesses as an alternative to sole proprietorships other kinds of business. LLCs act as a hybrid entity with some characteristics that are similar to corporations, and others that are similar to sole proprietorships and partnerships.

Having an LLC creates a business entity that is responsible for its own debts and liabilities, which keeps your business assets separate from your personal assets. Under an LLC, the owner(s) is not personally liable for the LLC's debts and liabilities.

Liability Protection

Liability protection is probably one of the core benefits of having an LLC. Once you have an established LLC, your assets aren't at risk if your company is sued. It also helps to protect your assets if your company goes into debt or runs into other financial trouble.

Flexible Tax Management

Because LLCs are created under State governments, they have a lot more options when it comes to federal taxes. They can be taxed as sole proprietorships and S or C corporations. If you have multiple members in your LLC, you can also choose to have your LLC taxed as a partnership depending on which tax structure gives your business the most advantages.

Privacy

You can also form an LLC anonymously, which can help keep your connection to the LLC out of public view. Of course, your bank and the government will still know that you're connected to the LLC, especially if you're the sole member of that LLC. But it will make things a little easier to maintain your privacy and keep your personal life separate from your business life.

Professionalism

Having an LLC can also make your business appear more professional and trustworthy to other businesses and their representatives. It's a good way to indicate that you are serious about what you're doing and that your company is trustworthy.

How to Form an LLC in Delaware

Starting a Delaware LLC involves a few key steps, each designed to legally establish your business and keep it compliant with state requirements. From choosing a name to filing your Certificate of Formation, here's a step-by-step guide to help you get your Delaware LLC off the ground the right way:

Choose a Name

You also need to choose your LLC's name. While the exact requirements can vary from place to place, almost every state has these two requirements:

• Your name must be unique to you; you cannot register a name that another business is already registered under in the same state.
• You must include a variation of Limited Liability Company or LLC in the name, usually at the end.

Your LLC's official name doesn't have to be the name you use in public in every state. Some states will also allow you to register a separate Trade Name that you use in your day-to-day business dealings. If you need some inspiration, check out our business name generator.

Choose a Delaware Registered Agent

Every Delaware LLC is legally required to appoint a registered agent, and in this state, the role carries more weight than it does elsewhere. Your registered agent acts as the official point of contact between your LLC and the state, receiving legal documents, tax notices, and other time-sensitive correspondence on your behalf.

The registered agent must have a physical street address in Delaware and be available during normal business hours. P.O. Boxes are not accepted. Since most Delaware LLCs are formed by out-of-state business owners, the registered agent often serves as the company's only physical presence within the state.

Delaware also allows LLCs to maintain privacy by not requiring member or manager names in public filings. As a result, the registered agent is typically the only public-facing contact for your business. Missing an important notice from the state or a legal document delivered to your agent could result in penalties, loss of good standing, or even default judgments in legal disputes.

Because of this, many business owners choose to hire a professional registered agent service. This helps ensure your Delaware LLC remains compliant, your documents are handled promptly, and your business stays protected.

File Your Delaware LLC Certificate of Formation

To officially create your Delaware LLC, you'll need to file a Certificate of Formation with the Delaware Division of Corporations. This document serves as your company's formal registration with the state and includes basic details such as your business name and the name and address of your registered agent.

Unlike some states, Delaware keeps its LLC formation requirements simple and streamlined. The Certificate of Formation does not require member or manager names, which offers an added layer of privacy. Once filed and approved, your LLC is legally recognized and authorized to conduct business. This filing also allows the state to keep a record of your business for tax and compliance purposes.

Delaware LLC Benefits & Disadvantages

Delaware is one of the most popular states in the country for forming LLCs, and for good reason. The state offers strong legal protections for business owners, a well-established Court of Chancery that handles business disputes efficiently, and a clear, flexible LLC Act that allows for customized operating agreements. Delaware does not tax out-of-state income for LLCs that do not operate within the state, which is particularly attractive for remote and online businesses.

Delaware also allows for enhanced privacy. LLCs are not required to list member or manager names in the public filing, which helps protect personal information. The state's formation process is fast and reliable, with online filing options and consistent processing times.

For LLCs that do not have a physical presence in Delaware, there are additional costs to consider. You will be required to maintain a Delaware registered agent and may still need to register as a foreign LLC and pay fees in the state where you actually operate. Additionally, Delaware charges a $300 annual franchise tax for LLCs, regardless of income or activity level.

Despite the higher costs, Delaware remains one of the best states to start and grow a business thanks to its trusted legal system, strong liability protections, and nationwide credibility.

Delaware LLC Costs & Fees

Forming and maintaining an LLC in Delaware involves a few key expenses that business owners should be aware of and budget for:

• Certificate of Formation – $90: This one-time filing fee is paid to the Delaware Division of Corporations to officially create your LLC.
• Annual Franchise Tax – $300: All Delaware LLCs must pay a flat $300 franchise tax each year, regardless of income or activity. This fee is due by June 1 to avoid penalties and interest.
• Registered Agent Fee – Varies: If you choose to hire a registered agent instead of acting as your own, costs typically range from $100 to $300 annually.
• Other Potential Costs:
  • Name reservation (not required): $75
  • Certified copies of documents: Usually $10-$50 per copy
  • Business Licenses & permits: Vary by city and industry

While Delaware's fees are higher than some states, the strong legal protections, privacy benefits, and streamlined filing system continue to make it a top choice for LLC formation nationwide.

Delaware LLC Taxes

Delaware LLCs benefit from a flexible tax structure that allows business owners to choose how the company is taxed. By default, a Delaware LLC is treated as a pass-through entity for federal tax purposes, meaning the business itself does not pay federal income tax. Instead, profits and losses are reported on each member's personal tax return, avoiding double taxation.

LLCs can also elect to be taxed as a corporation by filing Form 8832 or Form 2553 with the IRS. This option may be beneficial for businesses that plan to reinvest earnings or pay members a regular salary.

At the state level, Delaware does not impose income tax on LLCs that do not operate within the state. If your LLC does business outside of Delaware and has no physical presence in the state, you generally will not owe Delaware income tax. However, if your LLC conducts business within Delaware, state income tax may apply to your earnings.

Other Common Tax Considerations:

• Franchise Tax: All Delaware LLCs must pay a $300 annual franchise tax, due by June 1 each year.
• Sales and Use Tax: Delaware does not have a state sales tax, making it one of the few states with no sales or use tax requirements.
• Employer Taxes: LLCs with employees must register for employer withholding and unemployment insurance taxes through the Delaware Division of Revenue and Department of Labor.

With no sales tax, no tax on out-of-state income, and a straightforward franchise tax, Delaware offers a favorable tax environment for many types of LLCs.

Delaware Business Formation Stats & Growth Trends

Delaware is one of the most popular states in the country for forming LLCs, attracting both small business owners and large corporations from across the U.S. and around the world. In 2023 alone, over 55,000 new business applications were filed in Delaware, a number that continues to grow each year due to the state's strong legal protections and business-friendly policies.

More than 65% of Fortune 500 companies are incorporated in Delaware, and thousands of LLCs are formed annually by entrepreneurs looking for privacy, legal stability, and tax flexibility. Delaware's Court of Chancery, which focuses exclusively on business law, provides fast and predictable rulings that give business owners added peace of mind.

The state is especially attractive for online businesses, holding companies, and startups planning to raise capital. Whether based in Delaware or operating entirely out-of-state, businesses continue to choose Delaware for its reliable legal framework, efficient formation process, and long-standing reputation as a premier home for American companies.

Delaware EIN & Bank Account

Once your Delaware LLC is officially formed, the next step is to apply for an Employer Identification Number (EIN) through the IRS. This number serves as your business's federal tax ID and is necessary for key activities like hiring employees, filing federal taxes, and opening financial accounts. The process is free and can be completed quickly online, with most EINs issued immediately after submission.

After securing your EIN, you'll want to open a business bank account in your LLC's name. This is a critical step for maintaining your limited liability protection and keeping your business finances organized. Delaware LLCs are widely accepted by banks across the country, which is especially helpful if your business is based outside of Delaware but registered there for legal or strategic reasons.

To open an account, banks will typically request your EIN confirmation, a copy of your approved Certificate of Formation, and your operating agreement. Whether you're managing client payments, separating investment funds, or preparing for future growth, a dedicated business account helps establish your Delaware LLC as a legitimate and professional entity.

About LLC Attorney

Effective planning is crucial in business, where the risks and rewards are significant. LLC Attorney's approach to business formation services extends well beyond simple LLC establishment. We ensure our clients receive more than just a certificate of formation. Our services encompass comprehensive asset protection, registered agent services, and estate planning, providing significant value beyond the fundamental legal structure. We take pride in building lasting relationships with our clients, supporting them well beyond the initial setup to help maintain ongoing compliance and success.