If you’re looking to start a business but unsure where to begin, Delaware might be the ideal state for you. This state offers several advantages over Georgia, such as reduced registration requirements and privacy protection.
Delaware does not require you to list the names or addresses of your members or managers, which is one major reason why so many businesses opt to form there.
Taxes
When selecting which state to form your business in, it’s important to factor in the taxes associated with each. Delaware is often chosen for LLC formation as it has one of the most business-friendly legal systems and doesn’t tax out-of-state corporate income.
Delaware boasts a straightforward business structure that is easy to comprehend and adhere to. Furthermore, the state has established business codes and statutes which enable swift resolution of legal disputes.
However, the state does require you to pay a $300 tax to them by June 1 each year – this is known as an alternative entity tax.
To avoid paying this tax, ensure all members of your LLC are residents of the state. Furthermore, designate a registered agent within that region who can receive legal notices and other important correspondence on behalf of your LLC. It’s also essential to keep track of their address so you can easily contact them if further assistance is required.
Licensing
One of the most daunting challenges when starting a new business is navigating all licensing requirements – both state and local. Fortunately, there are reliable online formation services that can take care of every step in the process.
For instance, Incfile offers a comprehensive package that includes an expertly prepared Operating Agreement. Other popular options include ZenBusiness, Swyft Filings, Northwest Registered Agent and LegalZoom LLC services.
Delaware LLCs must have a registered agent, who acts as your official representative and receives all legal documents from the state. This individual or business must have an address in Delaware and be able to accept service of process on your behalf.
In 2019, the Delaware LLC Act added a series LLC option that permits you to divide your business into different protected divisions. This provides an avenue for protecting certain parts of your operation while avoiding liability for any issues within that division.
Requirements
As a business owner, one of your first decisions should be incorporation. Which state and entity best suits your company will have an enormous effect on its long-term success.
The most popular option for incorporation is an LLC, but there are other viable options as well. Delaware has long been considered “The Number One” state due to its comprehensive corporate laws.
Forming an LLC in Delaware offers your company the greatest liability protection. It acts as a shield between personal assets and the company itself, shielding you from debts that could be filed against it in case of litigation or bankruptcy proceedings.
If you choose to incorporate in Delaware, you must file your certificate of formation with the state. This can be done either electronically or by post for a nominal fee of $90.
Costs
Forming an LLC can vary significantly between states due to each having its own regulations and rules for filing fees, annual reports and more.
Delaware is often regarded as one of the best states to form an LLC due to its robust corporate law structure and Chancery Court system. Furthermore, Delaware boasts a speedy and efficient Division of Corporations.
Many businesses opt to incorporate in Delaware due to its affordable initial filing fees and franchise taxes. Furthermore, the state doesn’t tax out-of-state income, which can save companies money over time.
Additionally, the state boasts an outstanding business-friendly legislature that regularly reviews business statutes and makes changes to meet modern business needs.
Once you’ve selected a name for your Delaware LLC, registration with the state is necessary. A filing fee of $90 must then be paid.
