Delaware LLCs are among the most preferred business structures to incorporate for both US citizens and non-citizens, due to their low formation fees and tax-friendly structure.
To register an LLC in Delaware, you need to file both a certificate of formation and cover memo. In addition, it is necessary to name a registered agent.
Limited Liability
Limited Liability Companies (LLCs) have become an increasingly popular alternative to corporations, providing businesses with both the flexibility and reduced paperwork of partnerships or sole proprietorships while benefiting from limited liability protection that corporations provide.
Contrary to corporate law, which binds directors and officers to liability framework established through court rulings, LLCs allow their members and managers to shape the liability provisions of their operating agreement any way they see fit – this flexibility stems from Delaware’s longstanding policy favoring freedom of contract.
Delaware LLCs also enable members and managers to establish their own minimum number of shares (if applicable) as well as to include their member/manager name in the Certificate of Formation without residency or age restrictions, making managing multiple members’ businesses simpler – another advantage of an LLC structure.
No Management Requirements
Delaware LLCs are hybrid business entities that offer liability protections similar to corporations while also offering more management flexibility. A Delaware LLC can be an excellent solution for small businesses that wish to keep personal data protected while requiring minimal administration efforts.
Delaware LLCs also allow their owners to create separate entities within them known as series. This feature permits multiple protected entities within your LLC that grant separate titles to assets, liens and bank accounts.
Once you’ve decided to create an LLC, it is crucial that legal formation proceedings start immediately in order to avoid missing any important steps and remain compliant with state regulations.
After forming an LLC, one of the first tasks you should do is open a bank account for it. This will help protect both yourself and the business against debt or lawsuits that might come their way.
No Requirement for an Operating Agreement
The Delaware Division of Corporations does not mandate an operating agreement, but having one is highly recommended as it protects personal assets of owners from actions taken by an LLC.
An operating agreement is a document that establishes the rules and ownership of a business. It can either be written down, verbally agreed upon or implied, and should be signed by all members.
Keep a copy of the LLC operating agreement in an accessible place so that it can be referenced should any disputes or inquiries about the company arise.
Delaware incorporation offers entrepreneurs numerous advantages, from low maintenance structures and court proceedings dedicated to business law cases to an easy filing process and court of Chancery dedicated specifically to cases related to these businesses. But as it can be tricky for some individuals to navigate Delaware laws and filing requirements on their own, hiring an attorney to guide you through each step may be helpful.
No Requirement for a Registered Agent
Delaware LLCs are not required to have a registered agent; however, if you want to ensure your LLC always remains available to receive legal notices and other official correspondence from the state, hiring a registered agent service could serve as its representative and ensure your legal notices arrive on time.
In Delaware, when creating an LLC you must select and register an agent by filing the Certificate of Formation (otherwise known as Articles of Organization in other states). Your chosen representative must possess a physical address within Delaware and be available during business hours to accept legal documents from your legal team.
Your registered agent’s identity and address become public records; therefore, for privacy’s sake you might consider hiring a registered agent service instead. Alternately, a Certificate of Amendment allows for any desired changes.
The Delaware Division of Corporations offers an online registration form that allows users to input the details of their registered agent. While this option makes filing easier than ever, there will be fees of $90 and $200 applicable depending on whether your LLC operates domestically or globally.
