Before forming a Delaware LLC, make sure you meet all of the state’s filing requirements. These may differ based on your industry, where you do business and whether or not employees are present.
First, you must complete and file a Certificate of Formation with the Delaware Division of Corporations. You can do this either online or by post.
Articles of Organization
An LLC must file a certificate of formation, or articles of organization with the Delaware Secretary of State. This document outlines the company’s purpose, names its members and registered agent, and can be viewed publicly on the state’s website.
Delaware is unique in that it does not require LLCs to file annual reports. However, both domestic and foreign LLCs must pay a business entity tax of $300 annually by June 1.
The Articles of Organization (also referred to as the Certificate of Formation) must include the identity and address of each member. Furthermore, it requires a designation of a registered agent who must maintain a physical office in Delaware and be accessible during regular business hours to accept service of process.
When starting a new business or expanding an existing one, having an effective operating agreement in place is critical. This will guarantee all owners are on the same page regarding what’s expected of them and how their duties will be managed. Furthermore, having such an agreement in place can help prevent any future conflicts among owners.
Registered Agent
When forming an LLC in Delaware, one of the first steps you’ll need to do is appoint a Registered Agent. This individual will accept and forward legal documents such as Service of Process for a lawsuit or official government notifications to your business.
Your Delaware registered agent must have a physical office within the state (not just a P.O. box) and be available to receive and sign for service of process and official mail during normal business hours. This could present an issue if you’re working from home or remotely, as you might not always have access to your business’ main address.
A reliable registered agent will accept and forward crucial paperwork promptly, so you don’t have to worry about missing deadlines or paying fines for late filings. Furthermore, this frees up time for focus on growing your company rather than managing administrative tasks.
Shareholders
Delaware LLCs are an ideal option for any business owner who wants to limit their personal liability in connection with business debts and lawsuits. Furthermore, Delaware LLCs provide more freedom than corporations since they’re not bound by corporate formalities.
Forming a Delaware LLC requires filing the state with a Certificate of Formation. This document outlines your LLC’s name, registered agent, authorized stock and any other information required or permitted under state law.
Once filed, the Certificate of Formation will be returned to the incorporator with a digital stamp from the state – effectively serving as your business’ “birth certificate”.
In addition to your Certificate of Incorporation, you must also file an Operating Agreement with the Delaware Secretary of State. An Operating Agreement can be written, implied or oral and serves as a internal document that outlines all members’ rights and responsibilities.
An Operating Agreement can be invaluable in mediating disagreements among members, and it helps prevent unwanted transfers of ownership. It’s always wise to have a lawyer review and draft an Operating Agreement for your Delaware LLC.
Annual Report
Corporations, limited liability companies (LLCs), limited partnerships (LPs), and general partnerships formed in Delaware must file an annual report with the Division of Corporations by March 1. Furthermore, foreign corporations that qualify to do business within Delaware must also file their reports by June 30 and pay the appropriate fee.
In addition to annual reports, businesses must also file tax withholdings and pay income taxes to the state based on employee payroll amounts. FBAR (Foreign Bankruptcy Act) is another important reporting requirement that all Delaware companies must abide by.
Management of annual reports requires a great deal of dedication throughout the year. Many companies rely on spreadsheets, calendar reminders and file folders to stay organized, meet deadlines, collect information and submit their annual reports promptly.
