Your first consideration when choosing a name for your LLC is that it be unique from any other business in the state of Delaware. You can quickly and easily do a name check on the Delaware Secretary of State Division of Corporations business name database to verify the business name you want is available. For a $75 fee through said website, you can also reserve a company name for 120 days. To do so, you’ll need to submit the Application for Reservation of a Limited Liability Company Name.
In order to comply with Delaware state law, your company’s name must contain some form of the term “Limited Liability Company.” This can appear in several different formats from the whole phrase written out to any of the following abbreviations or alternative words (or abbreviations of those words): “L.L.C.,” “LLC,” “Association,” “Company,” “Club,” “Foundation,” “Fund,” “Institute,” “Society,” “Union,” “Syndicate,” “Limited,” and “Trust.”
The state of Delaware requires that any LLC have a registered agent for service of process. This means your LLC must have an entity that agrees to physically accept any legal papers on the company’s behalf should it be sued. In Delaware, an LLC can act as its own registered agent so long as the physical address of the LLC is within the state.
The registered agent does not have to be an individual person and can be any resident of the state of Delaware or a business entity authorized to do business in Delaware so long as the agent has a physical street address within the state.
You may want to consider preparing an operating agreement to outline the ownership and operating procedures for your LLC. Though not required by the state, an operating agreement will set the guidelines for running your company. This does not need to be filed with the state, but it can go a long way to ensuring your company’s success.
An IRS Employer Identification Number (EIN) is required for your LLC unless it is a single-member LLC with no employees. Obtaining an EIN is as easy as completing the application on the IRS website.
Additionally, any LLC in the state of Delaware is required to pay an annual Alternative Entity Tax by June 1 every year. The $300 tax is to be paid to the Delaware Division of Corporations Franchise Tax Section.
Although Delaware is one of the rare states that do not impose a sales tax on taxable goods or services, some businesses may be subject to Delaware’s Gross Receipts Tax. This tax is assessed on the total gross revenue of all businesses operating in the state. How much you pay for this tax will depend on your type of business. Additionally, if you have employees, you’ll need to register for Unemployment Insurance Tax through the State of Delaware website and also register for Employee Withholding Tax through the Delaware Division of Revenue.
Finally, it’s possible your company will need to register with the Delaware Division of Revenue. Whether or not your company needs to follow this step will depend on the exact types of taxes it will be collecting and/or has been collecting from the state and if you have employees.
If your company is a foreign LLC wanting to do business in Delaware, you will still need to follow all the steps outlined above.
You will need to file a Certificate of Registration of Foreign Limited Liability Company form with the Delaware Department of State as well as a Certificate of Existence, also referred to a Certificate of Good Standing, from your LLC’s domestic or home state. The Certificate of Existence must date back no more than 6 months prior to filing. The filing fee is higher for foreign LLCs in Delaware at $200.
Some industries will require you to secure state and local licenses to legally operate in the state of Delaware.
Since business licenses and permits are issued at all levels of government—federal, state, and local—and for such a multitude of reasons (e.g., health, building, signage, etc.), you should still do careful research to find out what licenses and permits you need. You can also hire or use a professional service to do it for you.