Delaware LLC Setup Guide

Complete step-by-step formation process for starting your LLC in Delaware

Quick Facts

State Filing Fee$110

Annual Renewal$300

Start Your Delaware LLC

Creating a limited liability company in Delaware doesn't need to be overwhelming with the right support. This Delaware LLC Setup Guide outlines every important phase of the formation process with transparency and clarity. Whether you're still weighing your options or ready to complete your filing, our Delaware LLC Setup Guide supplies the fundamental insights you need to establish your business entity effectively. Follow this Delaware LLC Setup Guide as your strategic tool for beginning your new business with certainty.

How to Start an LLC in Delaware

Forming an LLC in Delaware requires five sequential steps. Before you begin, gather the necessary information and materials to streamline the process.

What You'll Need:

Your desired business name (plus 2-3 backup options)
Business address and mailing address in Delaware
Names and addresses of all LLC members/owners
Ownership percentages for each member
Registered agent's name and physical address in Delaware
Payment method for Delaware's filing fee
EIN application information (Social Security Number or existing EIN)

The 5 Steps to Form Your Delaware LLC:

Step 1: Name Your Delaware LLC - Choose a unique business name that meets Delaware's requirements and verify it's available.

Step 2: Designate a Registered Agent - Appoint someone with a physical Delaware address to receive legal documents on behalf of your LLC.

Step 3: File Articles of Organization - Submit official formation documents to the Delaware Secretary of State along with the filing fee.

Step 4: Create an Operating Agreement - Draft internal rules that govern how your LLC operates.

Step 5: Obtain Your EIN - Apply for a federal tax identification number from the IRS.

Let's walk through each step in detail.

Step 1: Choose a Business Name

Picking the perfect name for your Limited Liability Company (LLC) represents a fundamental decision that shapes both your business identity and legal standing. You can approach this process independently, seek guidance from a business lawyer for expert legal counsel, or follow the path of 70% of our readers who opt for EZ Entity Setup (recommended).

Naming Standards

Your LLC name must comply with established guidelines:

Distinctive and separate from existing registered businesses in Delaware
Must exclude government-related terms including State, Treasury, or similar words that suggest governmental connection
Must avoid prohibited terminology such as Bank, University, or Olympic

Web Domain Verification

Research online to confirm your business name is obtainable as a website domain. Even without immediate plans for a business website, reserving the domain is critically important as it blocks others from claiming it, potentially protecting you from future complications and expenses.

Name Planning Approach

Because names receive approval through first-come, first-served processing, develop 2–3 backup options prior to filing your paperwork. This preparation provides you with alternatives should your primary selection be unavailable or fail to satisfy Delaware naming standards.

Confirmation Steps

After identifying your top choices, confirm availability using Delaware's business database or submit a formal name inquiry to validate your ultimate decision.

Step 2: Select a Registered Agent

During the LLC formation process, you must appoint a registered agent. This individual or entity functions as your business's designated recipient for legal papers, regulatory communications, and other critical official documents.

Requirements

Your appointed agent must maintain a street address located within Delaware where your LLC is being established.

Professional Registered Agent Service

Numerous business owners opt for professional registered agent services. This choice provides several advantages:

Critical paperwork is handled efficiently
Important filing dates are tracked and monitored
Your business maintains compliance with Delaware regulations
Personal information stays protected by avoiding public record exposure

DIY Approach

Although serving as your own registered agent is permissible, engaging a professional service typically offers greater dependability and protection.

Step 3: File the Articles of Organization

The Articles of Organization represent the primary filing documents required to officially establish an LLC within Delaware. These documents might be known by alternative names such as Certificate of Formation or Certificate of Organization in certain jurisdictions, though their fundamental function remains identical.

What's Included

The Articles of Organization specify essential information about your company, including:

Your LLC's official name
Principal business location
Designated registered agent details
Organizational management framework

Purpose and Benefits

The core function of the Articles of Organization is to formally create your LLC as an official business entity. Following successful filing and acceptance by Delaware, your business obtains legal recognition, together with the advantages and safeguards afforded to LLCs—including personal liability protection for members and official standing for business operations.

Step 4: Create an Operating Agreement

An Operating Agreement serves as an internal governance document that defines the ownership structure, management approach, and operational guidelines of an LLC. Although state mandates differ, this agreement is highly recommended for every LLC, including those in jurisdictions where it's not legally mandated.

What It Covers

The Operating Agreement defines:

Decision-making processes and authority
Distribution of profits and allocation of losses
Member duties and obligations
Procedures for member admission or withdrawal

Why It's Important

The significance of an Operating Agreement centers on the security and transparency it delivers. It helps avoid conflicts between members by establishing defined expectations and protocols from the outset. Furthermore, maintaining a formal Operating Agreement strengthens the LLC's recognition as an independent legal entity, which helps preserve limited liability protection for its members.

Consequences Without One

In the absence of this agreement, your company may fall under standard Delaware regulations that might not match your intended business operations.

Step 5: Get an EIN Number

An Employer Identification Number (EIN), also known as a Federal Tax ID Number, is a distinctive nine-digit identifier provided by the Internal Revenue Service (IRS). This EIN serves to recognize your LLC for federal taxation reporting requirements, functioning similarly to how a Social Security Number distinguishes an individual person.

Why You Need an EIN

Securing an EIN represents a crucial milestone for any new LLC. Typically, an EIN is necessary to:

Establish a business banking relationship
Bring on staff members
Submit federal and state tax returns
Obtain specific business licenses or permits

Benefits for Single-Member LLCs

Even when your LLC operates with just one member and maintains no payroll, an EIN assists in distinguishing your personal financial matters from business activities, reinforcing the legal boundary between yourself and the entity. This financial separation serves as a fundamental element in preserving your LLC's limited liability safeguards.

Next Steps after Forming Your LLC

Delaware has several additional requirements beyond the standard LLC formation process. These state-specific obligations must be completed to ensure your LLC is fully compliant with local regulations.

Registered Agent Requirement: Delaware requires a registered agent with a physical street address in Delaware (PO boxes are not acceptable). The agent must be available during business hours to receive legal documents.
Certificate of Formation Filing Fee: Delaware charges a filing fee of $90 for the Certificate of Formation (Articles of Organization). Additional expedited processing options are available for an extra fee ($50 for 2-hour service, $100 for 1-hour service).
Annual Report Filing: Delaware requires an Annual Report to be filed each year by June 30th with a filing fee of $25. This report must include the LLC name, registered agent information, and member/manager details.
Franchise Tax Requirement: Delaware LLCs must pay an annual franchise tax of $300 or more, depending on the gross receipts of the business. This is due on June 30th each year.
Certified Copy of Certificate: You may want to obtain certified copies of your Certificate of Formation from the Delaware Division of Corporations for an additional fee ($25 per certified copy) for loan applications and business purposes.

Benefits of LLCs in Delaware

Delaware offers several compelling advantages for LLC formation that make it an attractive choice for business owners. These benefits can provide significant value for your business operations and growth.

No State Income Tax on Out-of-State Operations: Delaware does not impose income tax on LLCs that do not conduct business within the state, providing significant tax savings for businesses operating nationally or internationally.
Low Filing Fees: Delaware has one of the lowest initial formation costs at just $110 for the Certificate of Formation filing fee, making it cost-effective to establish your LLC.
Affordable Annual Franchise Tax: Delaware's annual franchise tax is only $300 per year, which is significantly lower than many other states, ensuring minimal ongoing compliance costs.
Strong Privacy Protections: Delaware allows LLC members to maintain anonymity through anonymous LLCs, keeping owner information confidential in public records and filings, which is not available in all states.
Excellent Legal Framework: Delaware's comprehensive business-friendly legal system and the renowned Delaware Court of Chancery provide superior legal protections, asset protection from creditors, and a reliable business environment.
Flexible Operating Structure: Delaware law allows members to establish their own company structures and rules with minimal startup requirements and simple maintenance, offering considerable operational flexibility.
Strong Asset Protection: Delaware LLCs provide robust liability protection, separating the business from its owners and shielding members from personal liability for the company's debts or legal obligations.
Simple Formation Process: The streamlined formation process allows businesses to establish a Delaware LLC quickly and easily online, enabling rapid market entry.
National Legal Precedent: Delaware's business laws are studied nationwide by lawyers, judges, and law students, ensuring well-established legal interpretations and predictable business outcomes.