Delaware is a popular state for small businesses to form an LLC. But before you get started, there are several steps that must be completed.
The initial step in starting your business venture is registering it with the Delaware Secretary of State. Utilizing Division of Corporations’ entity name search tool to confirm no other Delaware company has already claimed your desired name, you can begin.
Choosing a Registered Agent
Selecting the ideal registered agent is a key element of your business formation process. You need an established company that will accept all formal state communications on behalf of your business and abide by all state statutory obligations.
In most states, companies have the option to designate an individual or service as their registered agent. Some owners may opt to be their own registered agent, while others may select a partner or manager as the designated representative.
Some business owners may elect to utilize a registered agent service for receiving all important legal documents and mail related to their operations. Doing so can save them both time and money since these tasks will be taken care of on their behalf.
Northwest Registered Agent offers a comprehensive suite of services at competitive prices with outstanding customer service. They provide street address services, accept mail and serve process on your behalf, scan documents, store them online, and send you compliance deadline filing alerts.
Filing Your Certificate of Formation
Once you have selected an LLC name and registered your business address with the Delaware Secretary of State, it is time to file for Certificate of Formation. You can do this online using Document Upload Service or via mail.
You must select a registered agent for your new LLC, who will receive legal documents on behalf of the business. You have two options: act as your own agent or hire an outside firm to do it on your behalf.
Once all documents are filed, you should receive your Certificate of Formation within 3 weeks. Alternatively, for an additional fee you can opt for expedited processing which takes 1 hour, 2 hours or same-day service.
Once your Certificate of Formation is approved, you can open a bank account and business credit card for your LLC. This is an essential step in securing liability protection. It helps keep personal assets separate from the finances of your business in case there is ever any litigation filed against it.
Paying the Filing Fee
Delaware boasts an array of advantageous tax and business laws that other states cannot match. Unfortunately, forming and running an LLC in Delaware also comes with certain costs you must bear in mind.
Before anything else, you must file a Certificate of Formation with the Delaware secretary of state. The fee for this is $90 and can be paid online, by fax, mail or personal delivery.
Second, you must appoint a registered agent for your LLC. This individual will accept legal and official mail on behalf of the business, as well as serve as the point person in case there is ever any litigation or other legal issue with the state.
Finally, you must pay an annual franchise tax for your LLC in Delaware. This is due June 1 each year and there is a $200 late payment penalty plus interest accruing at 1.5% per month on any outstanding balance.
Filing Your Annual Report
In most states, annual reports are required for corporations and limited liability companies. Failure to file on time can result in late fees, penalties, and a poor standing with the state.
Delaware requires domestic corporations to file their annual reports online through the Delaware Secretary of State Division of Corporations website. To complete the process, enter your 7-digit Business Entity File Number and pay any applicable filing or franchise tax fee.
A corporate annual report contains details about a company’s assets, directors/officers and franchise taxes. It also includes the par value of its shares.
Domestic corporations must file their annual reports and franchise tax by March 1; foreign entities must file by June 30. If a corporation misses this deadline, they can be assessed a late fee of $200 plus 1.5% interest each month until it files its report and franchise tax; alternatively, the Delaware Secretary of State has the power to administratively dissolve the corporation for non-compliance.
