In Delaware, you create an LLC by filing "certificate of formation" with the Division of Corporations and paying a filing fee. You'll also need an LLC operating agreement, though it doesn't need to be filed with the Division of Corporations. Your operating agreement explicitly states the rights and responsibilities of the LLC owners. An operating agreement clarifies the business arrangement between the owners and governs how your LLC will be run. If you don't create a written operating agreement, the LLC laws of your state will govern the inner workings of your LLC. For more information, see Does my LLC need an operating agreement?, below.
After your certificate of formation has been filed and you have an operating agreement, your LLC is official, but you will still need to obtain the licenses and permits that all new businesses must have to operate. These may include a business license (sometimes also referred to as a "tax registration certificate"), a federal employer identification number, a sellers' permit, or a zoning permit. Forming an LLC does not exempt you from any of these requirements that apply to all businesses.
For more information, see the Licenses & Permits for Your Business area of Nolo's website.
To begin creating your Delaware LLC, visit the Online Delaware LLC page at the Nolo website.
Nolo's Basic Service. The lowest priced package is Nolo's Basic Service, which includes preparation of the certificate of formation and regular filing, which can take from three to five weeks.
Nolo's Standard Service. Our standard service package gets you all of the benefits of the Basic Service plus preparation of the IRS application for a tax ID (Form SS-4) and the Business Forms Bundle, containing 30 forms and contracts that every small business needs. Includes access to NoloCloud Legal Forms for business anywhere at any time from your account. Processing time is three to five weeks.
Nolo's Express Premiere Service. For these items plus Priority Rush Filing, a personalized LLC records book, membership certificates, an LLC seal, and preparation of the IRS application for a tax ID (Form SS-4), choose Nolo's Express Premiere Service. With Priority Rush Filing, Nolo will submit your certificate of formation to the Division of Corporations within one business day, and you'll receive your final LLC documents three business days later.
You can also add one or more of the following services for a small fee: preparation of a customized operating agreement, registered agent service, accounting help, and/or business license advice.
Note that filing fees charged by the state are not included in our package prices. The Division of Corporations charges $90 in state fees for our Basic package and $140 for the Express Premiere package. The filing fee will be added to your total when you check out.
Delaware LLCs also pay a $300 annual tax, due on June 1 each year, starting the year after you form your LLC.
Please note that coupon codes are not applicable to LLC packages.
If you order the Basic or Standard package, we will file your paperwork with the Division of Corporations within three or four business days and you'll receive your completed LLC documents three to four weeks later.
If you order the Express Premiere package, we will file your paperwork with the Division of Corporations within one business day. You will receive your completed LLC documents by email three business days later. Your customized LLC records kit will be sent directly from the manufacturer.
You have 90 days to work on your LLC formation without purchasing it. Every time you work on your LLC formation through Nolo's Online Legal Forms, your answers are automatically saved in the system. Once you complete and pay for your LLC formation, Nolo's Online Legal Forms will store your personal information for one year.
Federal taxes. The IRS does not impose taxes on the LLC, assuming you don't elect corporate tax treatment; LLC income is reported on the members' individual tax returns.
State taxes. You must pay an annual LLC tax (called an alternative entity tax) to Delaware's Franchise Tax Department each year by June 1, starting the year after you form your LLC. That tax is currently $300 per year. You may find it helpful to read Nolo's article on Delaware LLC Annual Taxes and Filing Requirements.
Self-employment taxes. LLC members (owners) who are active in the business will probably have to pay self-employment taxes on their share of LLC profits—just as partners in a partnership do. Fortunately, an LLC member can deduct, as a business expense, half of the self-employment taxes paid. (Members in manager-managed LLCs may not have to pay self-employment taxes if they are not active in the business; if you are in this situation, consult a tax adviser to see if you should pay self-employment taxes.)
You can form an LLC in Delaware even if your business will not be located in Delaware and/or no LLC members will live there. But you will probably still need to qualify your LLC to do business in your home state -- and this means you'll have to file additional paperwork and pay additional fees. For more information on whether you'll need to qualify to do business in certain states, read Nolo's article Qualifying to Do Business Outside Your State on Nolo's website. Note that if you don't register to do business in another state when required, you won't be able to enforce contracts in that state, and you may have trouble opening a bank account.
Also, be ready for some state tax complications if you form your LLC in a state that's different from the state where all of its members live. For one thing, the LLC members might have to pay personal income taxes in the other state on LLC income. (At best, you might get credit for those taxes in your home state and not have to pay twice. At worst, you might have to pay taxes you wouldn't have had to pay at home.) Other state taxes vary from state to state, and might influence your choice of location for an LLC. An LLC -- like any business -- has to pay franchise taxes, sales and use taxes, other transaction and excise taxes, and employment, property, and transfer taxes.
In addition, in most states, you need to maintain a registered agent in the state where you form your LLC. To avoid these hassles, most smaller LLCs that will operate in only one state form their LLC in their home state. For more information, read Nolo's article Where to Form Your LLC.
Like a corporation, an LLC is meant to be a permanent legal entity, and it will exist—and incur taxes and fees, whether or not you are actively operating a business—until you take legal steps to dissolve it. If you decide to discontinue business as an LLC, you must file paperwork with the Division of Corporations. In addition, you may need to complete certain franchise tax requirements before you can dissolve your LLC.
For general information on closing a business, read the article Closing Your Business: What You Need to Do on Nolo's website.
Note: You will receive a confirmation email that includes the following information.
Your certificate of formation will be generated and filed with the Division of Corporations. Turnaround times vary according to the package you choose.
If you ordered Nolo's Express Premiere Service, your LLC records binder and company seal will be sent to you independently, directly from the manufacturer.
As soon as your filing is complete, we will email you your final LLC documents, including your customized operating agreement (if you ordered one) and instructions on a few more steps you need to take, including holding an initial meeting of your members or managers and paying the $300 annual LLC tax (due on June 1 each year, starting the year after you form your LLC).
Once we send your documents to the Division of Corporations, we cannot refund your state filing fees and other third-party costs, such as courier and delivery services, should you decide to cancel your order. If you have a question after submitting your order, you may contact our online filings specialists here.
You have 90 days to work on your LLC formation documents without purchasing them. Every time you work on your LLC formation through Nolo's Online Legal Forms, your answers are automatically saved in the system.
After completing your purchase, you may no longer go back and change your answers because your order is being processed. You may, however, view your answers by signing in to your Nolo account at www.nolo.com/products/customer/account/login, clicking on My Account, and clicking on Delaware LLC.
To learn more about limited liability companies, visit the Limited Liability Company area of Nolo's website or read Nolo's Quick LLC: All You Need to Know About Limited Liability Companies, by Anthony Mancuso.