Delaware stands out among states for its business-friendly legislation and legal system, making it one of the premier places to incorporate. Furthermore, no taxes on corporate income earned outside its borders exist in Delaware.
Moving an LLC from another state requires extensive paperwork and additional yearly tax obligations, which is why it may be more effective to simply form a C Corporation in Delaware than move the LLC itself.
Taxes
Income taxes must be withheld on your business revenue in the state where it operates, unlike when operating as an LLC. First you are subject to corporate level taxes before being taxed again when dispersing dividends to shareholders.
As part of your move to Delaware, if your company must meet employer requirements like registering new hires and paying payroll taxes. Furthermore, you may require a state business license.
Moving a company to Delaware varies in cost depending on which service provider and work is needed for domestication. Our LLC Domestication Analyzer allows you to get an instant, no-committal fee quote for your specific transaction by analyzing both state laws and recommending the most efficient path forward that meets your company’s goals based on how much time our professionals will spend filing documents as well as the Division of Corporations processing timelines.
Registered Agent
Delaware is an ideal location for businesses as it does not impose state income tax payments from corporations or LLCs, value added tax (VAT), inheritance tax or inventory tax fees.
Hire a professional registered agent in Delaware as the agent for your company, but be aware that doing so could expose your home address on public records. Northwest Registered Agent offers an alternative solution which keeps your address private while still meeting certificate of formation requirements for companies moving into Delaware.
When changing registered agent in Delaware, it’s crucial that proper resignation procedures are followed. Failing to do so could result in missed deadlines and penalties being assessed against your company. The process involves filling out some simple forms and paying a nominal fee directly to the state of Delaware.
Annual Reports
When moving your business to Delaware, it is wise to create an Operating Agreement in advance. This will streamline the process while making sure it adheres to state laws. In addition, consider consulting with an attorney experienced with business contracts and moving businesses between states.
Relocating businesses must submit an annual report in Delaware as per legal requirement, which will include details like their name, officers and directors as well as registered agent details. Corporations are subject to annual franchise tax payments.
An alternative might be moving its domicile to Delaware, which would decrease the number of reports it must file and potentially save on fees and costs associated with filing reports.
Dissolution
Close an LLC can be for many different reasons. From moving operations to another state or dissolving altogether, following proper procedures to make sure all required requirements are fulfilled is crucial to its success.
Dissolving a business involves dissolving it, fulfilling any outstanding financial obligations, distributing assets, paying any outstanding debts and taxes due, and being fair with creditors and Members in terms of any distributions made during this process – otherwise creditors could file claims against those Members who received distributions that weren’t legally permitted.
An operating agreement should provide guidelines for canceling a business. Consulting with a tax professional or law firm to make sure all state and federal requirements have been fulfilled is also helpful. Once all steps have been completed, a Certificate of Cancellation should be filed with the Corporation Division.
