How to Start an LLC in Delaware

Under Delaware law, the name of an LLC must include the words Limited Liability Company or the acronym “LLC.”. In addition, a name may include a members name, or the words “club”, “foundation”, “fund”, “institute”, “society”, “union”, “syndication”, or “trust”. Your LLC’s name cannot be misleadingly similar to those of other corporate entities already registered with the Delaware secretary of state.
Names can be checked for availability by searching the Division of Corporations Business Name Database at the Delaware Department of State. An available name can be reserved for 120 days for a $75 fee. Reservations are made online at the Delaware Division of Corporations website, or a reserved limited liability company name application can be printed and filed with the division via postal mail.

Every Delaware LLC has to have one agent to serve legal processes within the state. This is an individual or corporate entity who agrees to receive legal documents on the LLCs behalf should they be sued. If an LLC is physically located in Delaware, they can serve as their own registered agent.
The registered agent can either be a natural person who is a resident of the state of Delaware, or an established corporate entity authorized to conduct business in Delaware. The registered agent must have a physical street address within the State of Delaware. A list of registered agents in Delaware is available on the Secretary of State’s website.

A Delaware LLC is created by filing online, by mail, or by fax, the Certificate of Formation of Limited Liability Companies with the Delaware Division of Corporations.

The requirements of the certificate are that it include:

• The LLC’s name.
• The name and address of the LLC’s registered agent.
• An authorized person’s signature. This can be the organizer or person authorized by the organizer.

An LLC operating agreement is not required in Delaware, but is strongly recommended. It is a domestic document establishing how your LLC will operate.

It sets forth the rights and responsibilities of members and managers, including how the LLC will be managed. It also helps to protect your limited liability, showing your LLC is really its own entity. In the absence of an operating agreement, your LLCs operating laws are set by the state.

For more information on writing an operating agreement, read “How to Write an Operating Agreement, for Beginners“.

If you have created an operating agreement, you do not have to submit one with your certificate of incorporation.

Unlike most states, Delaware does not require LLCs to file annual reports. You’re not off the hook entirely, though. All Delaware LLCs must pay an annual $300 Franchise Tax on or before June 1st of each year.

If your LLC has more than one member, it should get its own IRS employer identification number (EIN), even if it has no employees. If you create a single-member LLC, you only need to get an EIN for it if it is going to have employees, or if you choose to tax it as a corporation rather than as a sole proprietorship (disregarded entity). You can get an EIN by filling out an online application at the IRSs website. There is no charge to file.