How to Form an LLC in Delaware

Introduction

For many businesses, a limited liability company (LLC) is the best structure. It provides the protection of a corporation but has lower ongoing costs than other forms of incorporation. Also, there are no residency or minimum capital requirements to form an LLC in Delaware.

Name your company

• Read the name of your future business carefully. You’ll need to make sure that whatever you pick is distinguishable from other names in Delaware and elsewhere, so if there’s a chance someone else might have already used it, go with something else.
• Avoid using personal names, like “John Smith LLC.”
• Don’t use the name of another corporation or LLC (unless they agree to let you).
• Don’t use a generic word like “Commerce” or “Gifts” as the name for your new company—these are not allowed under Delaware law.

Appoint a registered agent

• What is a registered agent?

Registered agents are individuals or companies that act as your legal representative in Delaware. They’re responsible for helping you comply with Delaware’s corporate requirements and filing annual reports to the secretary of state. Registered agents can be an individual, such as yourself or another person (your business partner), or a business entity like a corporation or LLC.

• How do I appoint a registered agent?

To appoint someone to serve as your registered agent, you’ll need to fill out the Application for Resignation/Designation of Registered Agent form online at https://corpweb.delaware.gov/corpweb_cgi/search_agent_resignationform?active=yes&active=yes&active=yes&active=no&agenttypeId=0x0x000000100000003 (skip this step if you already have an existing registered agent). This form must include:

• The name of your company or LLC;
• The address where you want all correspondence sent; and
• The name of your new registered agent

File the Articles of Organization

• Obtain a Certificate of Good Standing from your home state.
• File the Articles of Organization with the Delaware Division of Corporations. You’ll need to file in duplicate and pay a fee for this step; the amount varies depending on whether you’ve already filed one or more certificates in another state and whether you have an annual report due in Delaware at the time of filing. The articles must contain certain basic information about your company, including:
• the name of your LLC;
• the address where its principal office will be located;
• the registered agent’s name and address (which is required by law).

Obtain an EIN

An Employer Identification Number (EIN) is a unique number assigned to businesses by the IRS. It’s required for most business entities, including LLCs, and it’s obtained through the IRS website. The easiest way to apply for an EIN is online at [link].

Once you have your EIN, make sure you save it somewhere safe—it’s one of the most important numbers in your business! You’ll need it when you submit your tax returns and pay taxes on behalf of your company.

Prepare an Operating Agreement

An operating agreement is a legally binding document that lays out the rules and regulations of your LLC. You can create this document yourself or hire an attorney to help you with it. Your operating agreement should include:

• How much capital each owner contributes to the company
• How profits are distributed among owners, including salaries they receive (if any) and how dividends will be paid out to them
• Who has decision-making rights over major issues affecting the company (such as hiring employees and buying new equipment), if not all owners have equal ownership shares in the business

Takeaway:

• The takeaway from this article is that forming an LLC in Delaware and opening a small business can be done easily if you follow these steps.
• Why is this important? An LLC is a great way to start your own business, but it’s not the only option available. You may also consider incorporating or registering as a corporation instead of setting up an LLC. The choice depends on your individual needs, so make sure you’re choosing the right structure for your company!
• How will this help the reader? By following these step-by-step instructions, our reader should have no problem setting up their own small business in Delaware.

Conclusion

The process of forming an LLC in Delaware is relatively straightforward, but it can take some time. Start the process by choosing a name for your company, then filling out the Articles of Organization and submitting them to the Division of Corporations. Once you have your Certificate of Organization, you’ll be able to obtain an Employer Identification Number (EIN) from the IRS and open a bank account at any financial institution within Delaware. After that, all that’s left is finalizing your Operating Agreement so everyone knows exactly how they will be compensated as well as what rights they have within this organization!