A Delaware LLC must have at least one member or manager. There are no age restrictions for members and no requirements to have a physical address in the state.
A Certificate of Formation will be filed to the Delaware Division of Corporations. The certificate must include the designated registered agent. The agent must have a physical address in Delaware and have listed hours for availability.
When forming an LLC in Delware, the formal business name must be accompanied by the words “Limited Liability Company” or “LLC”. The name must contain names of members such as “Club”, “Fund”, “Institute”, “Society”, and “Union”.
An LLC’s name must not be closely similar to the names of other businesses already on file with the Delaware Secretary of State. Available business names are available which can be reserved for 120 days and paying a $75 fee.
An LLC operating agreement is recommended, but there are no publication requirements in Delaware. Business owners must comply with additional tax and regulatory requirements under state laws. Under Delaware law, LLCs must pay an annual $250 franchise tax by June 1 of each year.
Foreign LLCs looking to do business in Delaware must file a Certificate of Registration of Foreign Limited Liability Company. The foreign LLC’s home state must also provide a Certificate of Existence.
A Delaware LLC must have the designation “limited liability company”, “LLC”, or “L.L.C.” after the business name. Go to Legalzoom to have your Certificate of Formation filled correctly and submitted.
What is an LLC?
LLC refers to a Limited Liability Company, and it is organized by business owners. They have fewer corporate formalities and can be taxed by the IRS as a sole proprietorship, S corporation, or C corporation.
Each state has different requirements and regulations regarding the formation of an LLC. Business owners should check with state laws when considering forming an LLC.
Owners of LLCs are known as members, they can be individuals, corporations, other LLCs, or foreign entities. There is no limit on the number of members an LLC can have. In most states, “single-member” LLCs are allowed, where there is only one owner involved in managing the LLC.
The IRS will treat the LLC as a corporation, partnership, or included in the LLC owners personal tax return. A domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless they file Form 8832 and elect to be treated as a corporation.
LLCs carry tax advantages over other forms of business such as limited partnerships. The owners of an LLC do not assume personal liability for business debt, and any losses of the LLC can be used as tax deductions against active income.
An LLC can be formed through the state business formation process or consulting with LegalZoom.