Delaware LLC attorneys possess extensive knowledge about business law in their home state of Delaware. There are specific courts which have generated case law concerning LLCs and LPs within its borders.
Forming an LLC in Delaware is simple, requiring only a Certificate of Formation to register the company and obtain its EIN and legal basis for operation.
Flexibility
Delaware stands out as one of the more friendly states for LLC formation, providing multiple advantages to businesses that select this state as their place to establish. A knowledgeable startup lawyer can assist entrepreneurs with selecting an appropriate business entity and creating an operating agreement which anticipates potential issues.
Delaware LLCs combine the limited liability of a corporation with the flexibility of partnerships or sole proprietorships, giving owners protection from personal liability while keeping personal assets distinct from company assets.
LLCs also give owners of businesses with multiple business locations more control over the tax treatment of their business, which can save money in taxes. An LLC must register in Delaware with an agent who agrees to accept legal papers on its behalf if it’s sued; you can find one by searching online for “registered agent in Delaware”.
Limited Liability
Forming an LLC offers several distinct advantages. First and foremost is limited liability protection, meaning personal assets won’t be at risk from issues related to business operations. But it can be a complicated process which requires extensive knowledge of state and federal law – our experienced business lawyers are available to guide you through it all.
Delaware requires that LLCs file a Certificate of Formation with the Secretary of State to legally establish themselves, with names including “limited liability company” or “LLC,” distinct from any other businesses registered with them and without being misleading or confusing.
LLCs require a registered agent, an individual or business that agrees to accept legal documents on its behalf and receive lawsuits and legal notices on its behalf. An LLC may act as its own registered agent, or hire a service for a fee. An operating agreement must also be written, which allows members (owners) to establish ownership shares, responsibilities and any terms that need formalizing.
No Annual Reporting
Delaware treats single-member LLCs as disregarded entities for tax purposes, meaning that their business will not need to file an annual report or pay an alternative entity tax of $300 annually.
An LLC provides another advantage by safeguarding members’ personal assets against creditors of the company, meaning if it is ever sued, its creditors won’t have access to touch members’ individual holdings and possessions.
At the outset of creating an LLC, the first step should be obtaining a Certificate of Formation from each county superior court in which your LLC plans to operate business. This document must include information about who owns and manages it as well as whether or not it has been granted permission by state authorities to do business there. Secondly, your LLC must apply to IRS for an Employer Identification Number (EIN), which allows federal tax purposes identification of your business entity.
Taxes
Some professions, including law firms and accounting firms, opt to operate as LLCs to reduce taxes. By default, LLCs are taxed as partnerships unless they elect otherwise by filing Form with the IRS – meaning no federal corporate income tax and only members pay self-employment tax on their share of profits and losses from operating an LLC.
However, LLCs, LLPs, and GPs must register with the Delaware Division of Revenue as one of its Delaware One Stop services and pay a gross receipts tax of $300 by June 1. Furthermore, any business employing employees must withhold and file employee income tax quarterly.
Experienced Delaware LLC lawyers are invaluable when it comes to helping businesses navigate the formation and legal management processes for an LLC, and any disputes between members, partners or managers of an entity and themselves. Handling such matters on your own could cause unneeded stress and expense.
