fb

A Comprehensive Guide On Delaware LLC Cost

A Comprehensive Guide On Delaware LLC Cost

Are you a freelance entrepreneur, a small business owner, or the founder of a startup in Delaware? If so, then starting a limited liability company (LLC) could be one of the best business decisions you’ll make this year! Not only will you enjoy liability protection and some amazing tax benefits, but the cost to form LLCs in Delaware is very affordable. 

If you fail to properly start one, you could find yourself in legal trouble with the state or your business partners.

That’s where we come in. 

In this post, we’ll outline everything you need to know about the cost of Delaware LLCs, and why Delaware is an amazing state to form an LLC in. We will discuss:

  • Reserving your business name
  • Receiving Your Certificate of Formation
  • Getting a Delaware business license
  • Drafting your operating agreement
  • Paying taxes in Delaware
  • Fees for having employees
  • Cost of expedited services
  • Total cost of a Delaware LLC
  • The benefits of starting in Delaware
  • Additional FAQs

Let’s get started…

LLC Delaware Cost: Reserving Your Business Name

First things first: before you can form an LLC in Delaware, you need to register your organization’s name with the Delaware Division of Corporations. The division’s name is a bit of a misnomer, because they handle all business entity types. They also outline the rules required of entrepreneurs who want to form an LLC in Delaware or operate an LLC in Delaware while out-of-state.

Before you register, you should check to ensure your business name is available in Delaware. Legally, your LLC needs a unique name that doesn’t conflict with another Delaware LLC. Your organization’s name must include either “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” in the title. In Delaware, you cannot include the word “bank” or any of its variations. However, you can include words like “club,” “foundation,” “society,” “trust,” “union,” and “association.”

We also recommend checking with the Trademark Electronic Search System (TESS) database before applying for your LLC license. If another business in Delaware uses your intended name, you risk committing trademark infringement.

You should also look up the URL availability of your business name. It’s not a requirement, but choosing an organization name that matches your domain name will make it easier for people to look you up online. 

If your business name is available, and you want to reserve it while gathering the other information you need to officially become an LLC, you fill out a name reservation form, which reserves your name for 120 days. 

Total cost: $75 filing fee

Obtaining a “Doing Business As” (DBA) Name

If you decide that you only want to use your official LLC name for official documents and your business account, you can also opt to get a DBA name. Your DBA name is the name you’ll use in everyday conversation, which helps establish your brand’s identity and name recognition. 

To file a DBA name, you’ll need to complete the Registration of Trade, Business, and Fictitious Name Certification form. The form must be notarized, and you’ll have to file it with every county Superior Court where you’re doing business.

Total cost: $25 filing fee

Receiving Your Certificate Of Formation

Next on our list of how much to start an LLC in Delaware is your Certificate of Formation

Also known as the Articles of Organization, your Certificate of Formation is what makes your LLC an official business entity. This legal document outlines all your LLC’s basic information, such as:

  • Your company name and (DBA) designations
  • Cover page
  • Name and address of your registered agent*
  • Name and address of your company registrar
  • Where you're primarily doing business
  • Name and signature of the organizer filling out the Certificate of Formation
  • Type of business structure

If you’re a foreign LLC, you must fill out the Certificate of Registration of a Foreign LLC.

*A registered agent is a person or company that can accept legal and government correspondence for your LLC. Often, your registered agent is one of your LLC members or partners or a commercial entity. Your registered agent must have a physical registered address (not a P.O. Box), which becomes public record upon receiving your LLC license.

Total cost: $90 filing fee for domestic LLCs, $200 for foreign LLCs

Getting A Delaware Business License

Unlike many other states, Delaware requires every business organized in or operates within the state has a state business license. You can get one from the Delaware Department of Revenue.

Luckily, it’s an easy process. By creating a “One Stop” account, you can complete the process entirely online. Once you do, you’ll receive a temporary LLC license that’s good for 60 days, and you should receive your official license in the mail within 10 business days. 

Total cost: $50 - $450, depending on your business type

Some counties and cities in Delaware may also require you get a license with them. Check out your local government website to see if that’ll be a requirement for your LLC.

Various Costs To Consider

Let’s explore what’s involved when it comes to the financial side of setting up a Delaware LLC.

Cost To Form LLCs In Delaware: Drafting Your Operating Agreement

Fun fact: Delaware is one of five US states that requires LLC members to create an operating agreement. However, you’re not required to file any formal documentation with the State. Even if Delaware didn’t require one, it’s still a good business practice, even if you’re a single-member LLC.

Your operating agreement defines the rights, obligations, duties, powers, and liabilities of your LLC’s members between themselves and your LLC.

Your operating agreement should include:

  • A description of your LLC’s products and services
  • A description of your LLC’s purpose
  • LLC member names and addresses
  • Each member’s capital contributions and share of profits and losses
  • Each member’s voting rights
  • Profit distribution plans
  • A procedure for admitting new LLC members
  • LLC meeting schedules and voting procedures
  • Dissolution terms and procedures

Every member of your LLC should look over and sign your operating agreement. If it isn’t and you end up in a legal or financial dispute, the courts may end up responsible for finding a viable solution. Their decision might not be in the best interest of you or your LLC.

Total cost: $0

LLC In Delaware Cost: Paying Taxes

One of the key benefits of starting an LLC in Delaware is that Delaware doesn’t have a sales tax. However, you’re still responsible for meeting the rest of the state’s tax requirements, which 

usually include paying state taxes and federal taxes, like payroll taxes and self-employment taxes.

All LLCs registered in Delaware are also required to pay $300 in annual taxes, which is due by June 1 each year. Depending on your business type, you’ll also have to pay gross receipts and taxes. This tax varies from 0.0945% to 0.7468%. Finally, unless your LLC is taxed as a corporation, every member of your LLC must pay state income taxes on their personal returns. 

Total cost: $300 annual fee, plus additional taxes depending on your organization type and circumstances

LLC Cost In Delaware: Having Employees

If your LLC has employees, you’ll need to meet the requirements outlined by the Division of Corporations. These include:

  • Paying payroll taxes
  • Paying unemployment taxes
  • Reporting new hires to the state
  • Registering with the Division of Worker’s Compensation
  • Purchasing Worker’s Compensation Insurance

Total cost: Varies, depending on your circumstances

LLC Delaware Cost: Expedited Services

Delaware is a popular state to form an LLC in, so usually the Division of Corporations is on top of the LLC process. However, if you wish to speed up your LLC formation, you can expedite the process for $50 - $100.

Total cost: $50 - $100

Total Cost Of Delaware LLC 

As you probably have gathered, the cost of forming an LLC in Delaware varies substantially depending on your type of business and where you’re operating. You can start a Delaware LLC for as little as $140 ($90 for your Certificate of Formation and $50 for your Delaware business license) plus the $300 annual fee. However, we recommend setting aside a little more and doing your research to know exactly how much a Delaware LLC will cost you. 

Regardless of the amount, starting an LLC in Delaware is usually worth it. Here’s why:

The Benefits Of Starting An LLC in Delaware

No matter what state you’re in, all LLCs offer the same basic benefits, including:

  • Personal liability protection
  • Tax benefits
  • Owner and management flexibility
  • Profit distribution flexibility

However, if you are researching how to start an LLC in NY or want to start an LLC in Arizona (or pretty much any other state for that matter), but you have the option of starting an LLC in Delaware, you should definitely consider it. Delaware is arguably the best state to start an LLC in because of the additional benefits they provide, including:

  • No annual reports
  • No sales tax
  • No taxes on intangibles (e.g., trademarks and patents)
  • Streamlined LLC formation and filing processes
  • Limited naming restrictions
  • Limited restrictions for registered agents
  • No gross receipt taxes or state income tax requirements for LLCs that don’t conduct business in Delaware

There are also some setbacks to forming an LLC in Delaware, like:

  • $300 annual filing fee
  • High self-employment taxes
  • State business requirements
  • More expensive filing and name reservation fees

Luckily, the pros usually outweigh the cons. For example, an Indiana LLC costs $95 to file your Articles of Organization and an additional $31 filing fee due biennially, but you enjoy the unique benefits listed above.

Additional FAQs

Do you still have questions regarding how much it costs to start an LLC in Delaware, or inquiries about LLCs in general? We’ve got answers!

What Are The Tax Benefits Of Starting A Delaware LLC?

In addition to the ones already outlined in this article, LLCs let business owners adopt the tax status of other business entities (e.g., sole proprietorships, C corporations, and S corporations). Unless you choose to be taxed as a corporation, the IRS will designate your LLC as a disregarded entity, giving you similar tax responsibilities of a sole proprietorship.

What Is A Single-Member LLC?

Single-member LLCs have only one owner, instead of two or more. Typically, single-member LLCs get the benefit of a sole proprietorship and an LLC.

How Long Does It Take To Open An LLC In Delaware?

If you have the information ready to go, then setting up an LLC in WI can be done in just hours. Also, the Division of Corporations is pretty fast about approving your paperwork, so your LLC may be official in just three or four business days. The process is faster than if you were to start an LLC in Florida or most other states, where it usually takes seven to ten business days.

Conclusion: How Much Does It Cost to Form An LLC In Delaware?

Are you ready to form an LLC in Delaware and enjoy all the fantastic benefits the first official US state has to offer? By identifying how much starting and maintaining a Delaware LLC will cost you, you’re already setting yourself up for success!

Are you ready to capitalize on that success? Check out The Lazy Man’s Guide to Living The Good Life, and learn how to optimize your chances of running a thriving business!

Learn how to make passive income online

I've put together a free training on how we used the brand new “Silver Lining Method” To Make $10/Day, Then Systematically Grow to $100/Day, Then $1,000/Day & More…

About the author 

Mike Vestil

Mike Vestil is an author, investor, and speaker known for building a business from zero to $1.5 million in 12 months while traveling the world.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}
>