Ultimate Guide to Starting an LLC in Delaware: Step-by-Step Process

Starting a Limited Liability Company (LLC) in Delaware has become a popular choice for many entrepreneurs, and for good reason. Delaware is known for its business-friendly laws and flexible LLC structures, making it an attractive location for starting a business. 

If you’re considering forming an LLC but need clarification on the process, this guide is for you. We’ll walk you through each step. Let’s get into how you can start your LLC in Delaware.

Step 1: Choose a Name for Your LLC

Picking the right name for your LLC is the first and one of the most crucial steps. In Delaware, your LLC’s name must be unique and not too similar to other businesses registered in the state. It must include “Limited Liability Company” or its abbreviation (LLC).

How to Check Name Availability

Before settling on a name, use the Delaware Secretary of State‘s website to perform a name search. This ensures your chosen name is available and meets Delaware’s naming guidelines. Choosing a distinguishable and compliant name is essential for a smooth registration process, or do a quick, free name check online to see if your name is available. If you consider getting a website name that matches your business name, you can find good deals for website domain names on Namecheap. This step ensures your business name doesn’t conflict with existing entities and meets Delaware’s naming requirements.

Step 2: Appoint a Registered Agent

A registered agent is essential for an LLC in Delaware. This person or business entity agrees to accept legal documents for your LLC. The registered office is the official business address of your LLC. It can be your home, your office, or even the address of the Resident Agent. It could be yourself or a friend, or you can hire a professional service. Alternatively, you can use a legal service specializing in this area, services to Complete the Formation Process. You can bypass the steps using a third-party service such as Bizee or Northwest Registered Agent.

 

Check out our blog: ‘Is a Registered Agent Necessary? Your Guide to Finding an Affordable Option‘

Step 3: File a Certificate of Formation with the Delaware Department of State

It’s time to make your LLC official in Delaware! You must file the Certificate of Formation with the Delaware Department of State to legally establish your LLC. This critical document is what officially registers your LLC in Delaware.

How Much It Costs:

The filing fee for the Certificate of Formation in Delaware is $90. This is the standard fee for starting your LLC, although additional services or expedited processing may incur extra costs.

How to Send Your Form:

• Online: For the fastest processing, you can file the Certificate of Formation online through the Delaware Division of Corporations website. This method is straightforward and provides immediate confirmation of your filing.
• By Mail: You can also file by mail if you prefer. Complete the Certificate of Formation, include the appropriate fee and any additional documentation required, and mail it to the Division of Corporations, P.O. Box 898, Dover, DE 19903. 
• In-Person: If you’d like to file in person, you can bring your completed Certificate of Formation to the Division of Corporations at 401 Federal Street, Suite 4, Dover, DE 19901. This option is good if you’re local and want to interact with the Division’s staff.

Refer to the Delaware Division of Corporations website for the most current information, forms, and instructions to ensure a smooth filing process.

Step 4: Making an Operating Agreement for Your Business

Let’s discuss setting up some ground rules for your business. This is where an Operating Agreement comes in. Think of it as a handbook that explains how your business runs. It’s important because it helps everyone understand their role and what’s expected in your LLC.

Here’s what an Operating Agreement usually includes:

• Ownership: This part talks about who owns what percentage of the business. 
• Member’s Rights and Responsibilities: Here, you’ll write down what each person in the LLC can and cannot do and what they’re responsible for. It’s like a job description for each member.
• Joining & Leaving: This section covers how new people can enter your business and what happens if someone decides to leave. It’s good to have this figured out so there are no surprises later.
• Dissolution: This might sound a bit gloomy, but it’s practical. It’s about how to close down the LLC if you ever need to. It includes the steps to take and how to handle everything when wrapping up the business.

Creating an Operating Agreement is a smart move. It keeps things clear and organized so everyone knows what to expect, and it can save you a lot of headaches! 

Step 5: Getting Your EIN from the IRS

Your business needs a number called an EIN from the IRS. It’s like an ID number for your business. This number will help you as an identification number when getting bank accounts and credit accounts, filing taxes, and hiring employees.

It’s free, and you can get it from the IRS website at https://www.irs.gov/businesses/small. 

Delaware LLC Tax Requirements and Annual Report Filing

Employer Taxes and Tax Requirements in Delaware

Once your LLC is established in Delaware, it’s essential to understand and manage your tax obligations, especially if you’re planning to hire employees.

Employer Taxes: 

Suppose you have employees in Delaware and own an LLC. In that case, you must register to pay Unemployment Insurance Tax and Employee Withholding Tax with the Delaware Division of Unemployment Insurance and the Delaware Division of Revenue, respectively. This is important to comply with state employment laws.

Tax Requirements: 

You may also be required to pay various state taxes based on the nature of your business. Most LLCs in Delaware are treated as pass-through entities for federal tax purposes, meaning the LLC does not pay income taxes. Instead, profits and losses are reported on the individual member’s tax returns. However, LLCs can be taxed as corporations if it suits their financial goals.

• Regardless of tax status, obtaining an Employer Identification Number (EIN) from the IRS is essential for tax purposes, hiring employees, and other business needs.

Annual Report Filing in Delaware

Delaware requires all LLCs to file an Annual Franchise Tax Report, which is distinct from the practices in some other states. This report is critical for maintaining your LLC’s good standing with the state.

• Filing the Annual Report: The Annual Franchise Tax Report for LLCs in Delaware is due by June 1st of each year. The report can be filed online through the Delaware Division of Corporations website. As part of this filing, LLCs must pay an annual Franchise Tax, currently $300 for most LLCs.
• Importance of Timely Filing: Late filings can incur penalties and interest, and failing to file can jeopardize your LLC’s good standing in Delaware. Therefore, it’s critical to mark this deadline in your calendar and ensure that your report is filed on time.

Delaware is a great place to do business, but if you’re running an LLC, there are state tax laws and filing requirements you need to follow. It’s essential to understand your tax obligations, including employer taxes if you have employees, and keep up with your Annual Franchise Tax Report filings. 

New 2025 BOI Reporting Update

Effective March 26, 2025

Big update for business owners: As of March 26, 2025, U.S.-based companies no longer need to file a BOI report. This is a major change from the 2024 rules. If you run a domestic LLC, corporation, or similar entity inside the U.S., you’re no longer required to file Beneficial Ownership Information reports unless you’re registered as a foreign entity. Here’s what you need to know now:

First Report Deadlines:

• U.S.-Based Entities: If your company is formed and based in the U.S., you’re now exempt—no deadline, no filing.
• Foreign Entities Registered Before March 26, 2025: You must file your first BOI report by April 25, 2025.
• Foreign Entities Registered On or After March 26, 2025: You have 30 days from the date your business is registered in the U.S. to file your BOI report.

Who Needs to Report:

• Domestic Reporting Companies: No longer required to report as of March 26, 2025.
• Foreign Reporting Companies: If your company is formed outside the U.S. but registered to do business here, you still need to report.

Exceptions to Reporting:

Some foreign companies may be exempt. You’ll want to check the latest rules under 31 CFR § 1010.380(c)(2) and the official Small Entity Compliance Guide from FinCEN to confirm.

What Must Be Reported:

The report focuses on transparency. If you’re a foreign company that needs to file, you must report:

• Your company’s legal name, any trade names, and its business address.
• The jurisdiction where it was formed and its U.S. registration details.
• The full name, date of birth, home address, and ID number (plus an image of the ID) of each person who owns or controls the business.

When Must Reporting Companies File Reports:

• Foreign companies formed before March 26, 2025: File by April 25, 2025.
• Foreign companies formed after March 26, 2025: File within 30 days of registration.

Filing Reports & Noncompliance Penalties

• Where to File: All BOI reports must be submitted electronically through FinCEN’s official portal.
• Cost: Filing is free.
• Accuracy: You’re required to certify that the information is true and correct. Double-check your report before hitting submit.
• Penalties for Noncompliance:
  • Up to $10,000 in fines
  • Up to 2 years in prison if you knowingly provide false information or skip the filing.
• Safe Harbor Rule: If you realize you made a mistake in your report, you get 90 days to file a corrected version without penalty.

If you need help filing, you can use a third-party service or visit the official FinCEN website for full guidance.

What to Do After You’ve Started an LLC 

1. Open a Separate Business Bank Account: Keeping your personal and business money apart is super important. Mixing them up can cause significant problems, like losing the protection of having an LLC. This mix-up is sometimes called “piercing the corporate veil,” it can put your stuff, like your car or house, at risk if your business runs into trouble. To open a business bank account, you’ll need:

• Your LLC’s Articles of Organization.
• Your Operating Agreement.
• Your Employer Identification Number (EIN).

When picking a bank for your business, consider the fees, minimum deposits, and benefits (like earning interest) they offer. Look for features that help your business, like using a debit card to pay for things. 

Get a Business Credit Card

A business credit card is an excellent tool for handling business purchases and can help build your company’s credit history. Just like with personal credit, a good business credit score can make it easier to get loans and may qualify you for better terms. Check our favorite credit card for your business. 

Our Favorite Credit Card

2. Set Up Your Finances Right: Use good habits to track your money. This means not mixing your cash with your business’s. Good record-keeping makes tax time less stressful and helps avoid problems with the rules. You should use a program like QuickBooks to track your money, inventory, payroll, and sales. Talking to professionals like accountants or business lawyers is also intelligent, especially when understanding your LLC state’s tax rules. Find experts who know a lot about the area where your business is.

3. Create a Professional Website: A website makes your business look legit. WordPress is a great tool to build your site. You can check out Hostinger for web hosting. It’s a great and affordable option to get your site up and running.
   
   
   

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4. Announce Your Business with a Press Release: A press release is a fantastic way to promote your new business and attract customers.

Starting an LLC in Delaware might seem daunting, but breaking it down into these manageable steps can simplify the process. By following this guide, you’ll navigate the setup process smoothly, ensuring your LLC is correctly formed and compliant with Delaware laws.

Bizee Overview

​Bizee (formerly known as Incfile) is a business formation service that simplifies the process of launching and managing a company. Bizee has assisted over one million entrepreneurs in establishing their businesses. The company offers a range of services, including the formation of LLCs, S corporations, C corporations, and nonprofits, as well as ongoing compliance support.

Why Choose Bizee?

Now, you might wonder, “Why go with Bizee?” First off, they save you a ton of time. We all know how precious time is, especially when you’re trying to get your business rolling. Bizee takes care of the tedious and complex stuff, like filing documents with the state, so you can focus on the fun parts of running your business.

Another big plus is how they help you avoid mistakes. Let’s be honest: filling out government forms can be confusing, and one small error can set you back big time. Bizee knows their way around these forms like the back of their hand, ensuring everything is done right the first time.

Bizee Core Services

• Business Formation: They’ll help you officially start your business by filing it with the state. This includes setting up LLCs, corporations, and more.

• Compliance: Bizee ensures your business stays in good standing with the state by managing annual reports and other legal requirements.

These services are the backbone of Bizee, ensuring your business is set up correctly and remains compliant with state laws.

Bizee Additional Services

• Registered Agent Service: This is a must-have for keeping your business legit. Bizee will be your official contact for legal documents, ensuring you get all the necessary information.

• EIN Acquisition: Think of an EIN as a Social Security number for your business. Bizee can get this number for you, which you’ll need to open bank accounts and hire employees.