Filled with rich history, stunning beaches, and tax-friendly laws, Delaware may just be one of the most business friendly states. If you're forming a business within Delaware, you're probably well aware of the fact that Delaware was the first state to get rid of sales tax (one less thing to worry about). Regardless of that however, when you're starting your Delaware LLC, there's no doubt that you'll have a lot more questions. We've gathered many of the most frequently asked questions to help you hit the ground running with your Delaware LLC. From registering your company with the state of Delaware, to business licenses and corporate franchise taxes, we’ve got you covered. We’ve answered these questions below and linked extensively to our guides, tools and other services, which makes everything streamlined and simple.
How Do I Decide What the Best Legal Structure Is for My Business?
There are a few different options when it comes to starting a business in Delaware. From a legal perspective, there are three main types of Delaware for-profit business entities: LLCs, S Corporations or C Corporations. We believe an LLC provides the right mix of liability protection and ease of administration, for many entrepreneurs.
What Do I Need to Start a Business in Delaware?
In order to form an LLC in the state of Delaware, there are some minimum requirements you must meet. These are a completed Certificate of Formation, a business name and a fee you pay to the Delaware Division of Corporations. Here at Bizee, we recommend taking some additional steps before formally starting your LLC:
- Research your target market to make sure there’s a demand for the products and services you provide.
- Read industry guides to give you a starting point in your niche.
- Create a comprehensive business plan that defines the most important aspects of your Delaware business.
- Write an Operating Agreement that covers how you will run your LLC.
After you’ve created your Delaware LLC, you will also need to review your business license requirements, understand ongoing filing needs, set up a separate business bank account and get an accountant.
How Do I Register a Company in Delaware?
In Delaware, you register a business by completing and filing your Certificate of Formation with the Delaware Division of Corporations. You will need to gather information about your business, fill out the form and send it to the DE Division of Corporations along with your filing fee. This will formally create your LLC in Delaware.
You can file your Certificate of Formation on the Division of Corporations website or mail it in. Alternatively, Bizee can guide you through every step of the process by getting details from you and filing the form on your behalf — for free! There’s no additional charge for our basic LLC filing service, so all you need to do is pay the Delaware state filing fee.
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How Much Does It Cost to Form a Delaware LLC?
At the time of writing the fee charged by the Delaware Division of Corporations is $90. You can always check the latest Delaware filing fees here. You can also pay an additional $50 or $100 for expedited filing through Bizee, which will create your LLC faster. The amount of the expedited fee is dependent on how quickly you want your filing processed. Some LLC filing services do charge you extra to prepare and submit your filing documents, but at Bizee, we do this for free — so you only pay the state fee.
How Long Does It Take to Form an LLC in Delaware?
Once you’ve gathered all of your information together and filed your Certificate of Formation (or had Bizee do it for you), it can take 3-5 business days for the Delaware Division of Corporations to legally create your LLC. If you pay an additional $50 or $100 expedited fee, your LLC can be formed in as little as 24 hours, or the same day.
Is Your Business Name Available in Your State?
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How Do I Register a Business Name in Delaware?
There are a few ways to register your Delaware LLC name.
- If you’re forming a new business and your business name is unique in Delaware and meets state naming rules, you simply include it in your Certificate of Formation.
- If you want to change the legal name of your business, you'll need to file a Certificate of Amendment with the DE Division of Corporations.
- If you just want to do business under a different name, you'll need to register a fictitious business name with the county that your business is operating in, or have Bizee do that on your behalf.
If you want to prevent people from using your business name across the U.S., you can file a trademark for the name. We can help.
What Are Delaware Articles of Incorporation?
In other states, the formal documents that you file to form a corporation or LLC might be known as Articles of Incorporation. In Delaware, this document is called your Certificate of Formation, and it performs the same functions as the Articles of Incorporation.
Does Delaware Have Series LLCs?
Yes, actually, Delaware was the first to allow the formation of a Series LLC within the state. A Series LLC is a special type of LLC where you create one “overall” business and then have individual, series LLCs within it, each counted as separate legal entities.
To legally form a Series LLC, simply fill out the LLC Registered Series Formation form and file it with the DE Division of Corporations. The fee for a Series LLC formation in Delaware is $90.
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How Do I Change a Registered Agent in Delaware?
If you wish to change your Delaware Registered Agent you can do so by filing a Change of Agent Only Amendment with the DE Division of Corporations. Here at Bizee, we provide a free Delaware Registered Agent service for the first year if you file through us. If you’ve been using a different Registered Agent and want to switch to us, we’ll file the Change of Agent Only Amendment on your behalf.
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How Do I Perform a Delaware Registered Agent Search?
If you need to know the Registered Agent of a specific Delaware business, you can perform a Delaware Registered Agent search within the state's registered agent list.
What Delaware Business Taxes Do I Need to Pay?
As an LLC, any business profits you earn will be reported on your personal 1040 filing and reported and taxed as “pass-through” income. You will typically need to pay:
Important: As a Delaware LLC, you aren't required to pay sales or use tax as the state of Delaware does not have a sales and use tax.
What Is the Delaware Gross Receipts Tax?
Delaware’s Gross Receipts Tax is a tax on the total gross revenues of a business, regardless of their source. This tax is levied on the seller of goods or services, rather than on the consumer. Gross receipts tax rates currently range from .0945% to .7468%, depending on the business activity. To determine the gross receipts tax rate for your business activity in the State of Delaware, use the tax resources provided by the Delaware Division of Revenue.
What Businesses Need to Pay Gross Receipts Tax?
When you engage in business in the State of Delaware, you may be required to pay Gross Receipts Tax. This tax is paid by the seller of goods (tangible or otherwise) or the provider of services in the state. There are no deductions for the cost of goods or property sold, material or labor costs, interest expense, discounts paid, delivery costs, state or federal taxes, or any other expenses allowed.
How Do I Pay My Gross Receipts Tax?
You can file your GRT return online and make a payment via credit/debit card or by Automated Clearing House (ACH) transaction from your checking account by visiting Delaware's Tax Portal and clicking the link “File Gross Receipts Tax.”
When Is Delaware Gross Receipts Tax Due?
Delaware GRT returns and payments are due either monthly or quarterly, depending on a business’ total gross receipts. The DE Division of Revenue uses a “look-back period” to determine whether a business is a monthly or quarterly filer. Once your LLC has been registered via the tax portal, you should receive a notice with instructions on how often you must file a GRT return and pay taxes.
What Do I Need to Know About Delaware Franchise Tax?
Some businesses will need to pay a corporate franchise tax in Delaware, however it does not apply to LLCs unless your LLC is treated as a C Corporation for tax purposes.
Do I Need a License to Do Business in Delaware?
If you plan to conduct business within the state of Delaware, you'll likely need some form of business license in order to remain in operation. The types of business licenses you need will vary depending on your type of business, industry, location and various other factors. We can research the types of business licenses you might need for you.
We hope you’ve found this Delaware LLC FAQ useful. If you’ve used our services and have a question that isn’t answered here, let us know and we’d be happy to help.