Certificate of Formation in Delaware The certificate of formation is one of the key documents when it comes to creating a limited liability company in Delaware, as it will confirm your LLC has been recognized by the state and allows you to operate your business immediately.
The Certificate of Formation must specify the name and purpose of an LLC as well as its registered agent and duration (often perpetuity). Furthermore, it should be signed and dated by an authorized person.
Choosing a business name
When choosing the name for your company, select something memorable, reflective of its brand, and easily searchable online so people can easily locate you.
Selecting an appealing and easy to spell name for your business is an integral component of incorporation. Your name will feature prominently across logo, marketing materials and social media accounts. It’s essential that it fits well.
As part of your due diligence, it is also crucial that your chosen business name be available across all states where you plan on conducting business. This can be accomplished either via searching with the Secretary of State’s office, or with domain name search services.
Creating an operating agreement
Operating agreements are legal documents that outline the rules and procedures of running your limited liability company (LLC). While most states don’t mandate an operating agreement for LLCs, having one is still highly recommended.
An operating agreement can help your business avoid potential conflict in the future and safeguard personal assets. Furthermore, it will increase credibility with courts.
An operating agreement also helps establish an orderly chain of command. A well-drafted operating agreement should detail how decisions are made, how capital contributions and profits are distributed among members, what happens if someone leaves or dies unexpectedly, and how disputes should be handled between members.
Create an Operating Agreement Online or Draft it Yourself? Several websites provide operating agreement templates which you can adapt for the unique needs of your LLC.
Filing your company’s formation documents
Delaware is an ideal state to form a corporation due to its low start-up costs and tax advantages, and one of only a handful that allows corporations to issue stock without first being registered within their respective state.
Step one of forming your company involves filing a Certificate of Formation with the Delaware Division of Corporations. You may do this either online or via mail.
Your company must also choose a name that complies with Delaware’s naming guidelines; no name should be deceptive and it should distinguish your business from existing businesses in Delaware.
Last but not least, you will need to declare a designator such as “incorporated” or “LLC” as well as designate a registered agent who is responsible for receiving legal notices and important corporate documents on behalf of your corporation.
Current state filing fees for business filings is $89 plus $9 for every additional page and processing takes three weeks; expedited business filings can also be provided at an extra fee.
Reserved business names
Delaware businesses may reserve their company name for up to 120 days before registering with the state. This gives them time to decide when and if they should register it with them.
Reservation can protect a business from competitors who attempt to claim it before it has even launched. To reserve a business name in Delaware, file a Name Reservation Application ($75).
Name must be easily distinguished from all others registered in state, and do not contain words associated with banks, law offices or medical facilities which might confuse customers.
Names should also not contain profanities, words likely to promote terrorism or criminal activity, or anything that the Secretary of State finds offensive. She retains full veto power over any name she considers unsuitable.
