If you're an entrepreneur based in Delaware, forming an LLC is a great idea because this three-county state offers extended tax benefits and protection for all its LLCs.
To help you budget your business funds well, we sat down with our team of legal experts and spent weeks researching the costs of forming an LLC in Delaware.
Here’s what you can expect.
Quick Summary
- The filing fee for Delaware LLCs is $119 for submitting and filing the Certificate of Formation.
- In Delaware, you can act as your own registered agent or hire a professional company to be your LLC agent.
- DBA name filing in Delaware costs $25 for each state, and if your business is located in the three Delaware states, you'll have to pay $75.
How Much Does an LLC Cost in Delaware?
An LLC in Delaware costs $194. This amount covers submitting the Certificate of Formation for your LLC ($119) and state business license ($75).
However, note that you will incur other filing costs if you hire an LLC service or apply for other legal documents from the Delaware secretary of state.
Delaware LLC Filing Fee
The Delaware LLC filing fee is $119. This is for submitting the Certificate of Formation to the Delaware secretary of state.
Delaware allows you to file your Certificate of Formation more quickly. For a 24-hour turnaround, there is a $50 cost and a $100 price for same-day processing.
Delaware Registered Agent Service Fee
While incorporating your LLC, you must select a Registered Agent in accordance with Delaware department law.
The Delaware registered agent is the person or business receiving legal paperwork and official notices for your LLC.
A registered agent must have a physical street address in the state, be of legal age, and often be accessible during regular business hours.
There is no extra charge if you serve as your LLC's registered agent yourself or choose a trusted third party to do so.
The alternative is to work with a professional registered agent service, and you'll pay between $100 to $300 a year for this, depending on the service you hire.
Delaware Franchise Tax
All Delaware LLCs must pay an annual franchise tax of $300 to the Secretary of State of Delaware to keep their good standing.
Because this annual franchise tax is not based on the business entity revenue, all business owners must pay it even though they do not conduct any commercial activity with their holdings.
When your Delaware LLC is incorporated, you must pay this tax in full by March 1 each year. Late payments are subject to a $200 penalty fee and interest from the Delaware Secretary of State.
Other LLC Filing Costs
Apart from the basic paperwork filing fees, here are other LLC filing fees in Delaware.
1. Name Reservation
You may spend $75 to reserve a name for 120 days if you already have a business name and don't want it to be available for use by other business owners before you finish creating your LLC in Delaware.
Name reservations can be sent to the Delaware Division of Corporations via mail order or online [1].
Verify that your LLC name is available in Delaware before reserving the name.
2. Doing Business As Name (DBA)
You must register a DBA if your LLC operates under an assumed name other than the one stated on your certificate of incorporation.
DBA registration in Delaware is processed at the county level, costing $25 in all three Delaware counties.
Also, if you own LLCs in all three counties, the Delaware state requires you to apply for 3 different DBAs and pay a total of $75 for the processing.
The opportunity for branding in many target markets is one advantage of DBAs. If your LLC has many business divisions, DBAs may be used to create distinct brand identities that cater to a particular clientele.
3. LLC Operating Agreement
The conditions regulating the limited liability company, its interests, operations, administration, and clauses controlling the rights and duties of its members are laid out in a Delaware LLC Operating Agreement.
While operating agreements aren't required in Delaware, establishing one to lay out how the LLC should be handled is still a good idea.
You can draft an LLC operating agreement for $0 or hire an expert to create it for you for anything between $100-$250.
4. Delaware Certified Document Copies
A certified copy is a legal document copy that proves the validity of official documents that you filed with the Delaware Secretary of State.
Each certified copy in Delaware costs $50 and an extra $2 for each additional page.
These documents contain all essential details about your Delaware LLC, including the owner's name and filing dates.
The copies are issued after the SOS has verified that all the details are correct, and they seal it with the Delaware state official seal.
Certified copies, like an operating agreement, an annual report, or a certificate of status, are helpful for opening a business bank account, requesting foreign qualifications, or getting funds from potential investors.
5. Delaware Certificate of Good Standing
A certificate of good standing, also known as a certificate of existence, is a legal document that shows an LLC is in the right standing with the state and has paid all the taxes. This copy also displays the day and date that your LLC was incorporated in Delaware.
You can get a certificate of good standing from the Delaware Division of Corporations which costs $50 [2].
This document is issued to only compliant LLCs in good standing with the state. So if you failed to pay state income taxes or have any late payment penalties, you must clear them before applying for a certificate of good standing.
Check our guide to see when the LLC taxes are due in Delaware.
6. Employer Identification Number
After creating a Delaware LLC, the next step is to apply for an EIN number. An LLC must have a Federal Tax ID number to perform commercial activities in the US legally.
An EIN is also required when opening a bank account or signing up for business loans [3].
The EIN, or a federal tax number, is a nine-digit figure that the IRS assigns to each company and acts as your unique company security number.
If you're in Delaware, you can make an EIN application online for free on the Internal Revenue Service website.
If you hire a professional service, you can expect to pay anything from $50-100 for an EIN.
7. Delaware Trademark Registration
Registration for a trademark for your company products or services is a good idea if you wish to safeguard your brand name and logo and prevent competitors from using them.
Registering a trademark or service mark in Delaware costs $35, which lasts 10 years before you can renew it.
8. Delaware Business License
The Division of Revenue mandates that all LLCs in Delaware obtain a state business license that costs $75 for one business location and an extra $25 for each location your LLC operates.
The state business license lasts one year from the day your LLC was incorporated, after which you must renew it for the same amount.
9. Professional Delaware Licensing
According to Delaware law, everyone who wishes to practice their profession or run a company in the state must first get a license from the Division of Professional Regulation.
The goal of professional licensing is to demonstrate that a person or organization is capable and complies with the standards for offering services in a specific profession.
The cost of this filing fee varies from one profession to another.
Foreign LLC Registration in Delaware
If you're an entrepreneur owning an LLC in a state outside Delaware but are looking to extend your business into Delaware, you must register your LLC as a foreign LLC there.
To form or incorporate a foreign Delaware LLC, you must pay a $200 filing fee.
An online or postal submission of a Certificate of Registration of Foreign Limited Liability Corporation is required to register a foreign LLC in Delaware.
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FAQs
Do I Need To Pay Annual Delaware LLC Fees?
Yes, you need to pay annual LLC fees for your franchise tax and business license. Also, if you've hired a registered agent service, you'll have to pay their annual Delaware registered agent fee, which will vary depending on the company.
How Long Does It Take To Form an LLC in Delaware?
It takes 2-3 weeks to form an LLC in Delaware online and 3-4 weeks when filed via a mail-in.
Can I Form an LLC in Delaware Without Living There?
Yes, you can form an LLC in Delaware without living there. This holds as long as you have a registered agent service with a physical Delaware address who'll be available during regular office hours and handle all communication with the SOS.
Do You Need Professional Help with Your Delaware LLC?
As an LLC-friendly state, Delaware is a tax haven for small business owners and offers economic benefits that other states do not have. You can go through the entire process of forming an LLC yourself, or you can hire a professional service to do it on your behalf.
If you plan to incorporate an LLC in Delaware through a business formation service, check out our list of the best LLC services in Delaware.
These firms have top attorneys in the region to assist you with all issues relating to the registration of LLCs and the different ways you may profit from Delaware's advantageous company regulations.
In addition, they will also assist you in maintaining your LLC, handling tax and compliance work, and other expenses related to your Delaware company ventures.
References:
- https://corpfiles.delaware.gov/llc-nameres.pdf
- https://corp.delaware.gov/directweb/
- https://www.sba.gov/blog/what-ein-why-it-important
