Many people dream of having their own company to help them grow personally and financially. Once you decide to take on this challenge, you should be ready to handle the responsibilities that come with being a business owner.
If you are planning on starting your business in Delaware, you may have thought of choosing a limited liability company (LLC) structure. With the many benefits that come with it, it is no wonder why a number of startup owners and budding entrepreneurs choose it.
Forming An LLC
Each state has laws that govern the formation of businesses. Your company should comply with the regulations to make sure that your operations are legal. The necessary documents are pretty much the same in most states. However, you have to research specific requirements to avoid problems.
- Completed Form – If you want to organize a business in Delaware, you will have to file a Certificate of Formation with the Division of Corporations. In other states, this document is called Articles of Organization. You can either submit it by mail or online. Regardless of your filing choice, you have to download the form from the website of the Department of State and fill out all the applicable sections.If you choose to send the document by mail or give it in person, use this address:
Delaware Division of Corporations
401 Federal Street
Dover, Delaware 19901
- Filing Fee – The registration comes with a $90 filing fee. If you want expedited processing, you will need to add another $50.
What You Need To Prepare
The state requires companies that want to file Articles of Organization LLC to follow a multi-step process. You need to follow it carefully and make sure you disclose all the necessary information.
- Company Name – Your LLC should have a creative name to stand out among the competition. However, deciding on a name does not automatically make it final. Delaware has naming guidelines you need to follow. Aside from that, you have to make sure that no other active business entity is already using it. You can check its availability through a name search on the website of the Division of Corporations.To avoid any complications, check the guidelines that the state of Delaware has implemented. Your entity name needs to have any of the following:
o Limited Liability Company
There are also words that you should not include, such as:
o Bank, or any variation thereof
o Words that the Department of State deems objectionable, lewd, or racist
o Words that could confuse your company with a government agency
If you want to ensure that no other business entity gets to use your desired name before you finish the process, you can reserve it for 120 days with the Secretary of State. The reservation comes with a $75 fee.
- Registered Agent And Office – The state requires all LLCs to appoint a registered agent. This can either be an individual or a company that will serve as the point of contact between the company and state for all legal correspondence. Make sure the agent is always available during regular business hours at the registered office you indicated. The address cannot be a P.O. Box.An individual has to be at least 18 years old and a Delaware resident to qualify as an agent. Meanwhile, a company has to be qualified to serve as an agent in the state.
- Dissolution Date – If you plan on dissolving your LLC on a certain date, fill out the third section of the form. This will determine the effective date of the dissolution of your company.
- Provisional Information – The Articles of Organization LLC of Delaware allows you to include certain conditions, such as the duration of your LLC’s existence and special restrictions. There is a section for that in the form. If you do not have any supplemental information, you can leave the section blank.
- Execution – The organizer of the LLC has to sign the form and mention the date. This person is the one who prepares and files the form. You can find this section in the last part of the Certificate of Formation. You can designate an LLC member or hire a third-party organization.
Articles Of Organization And Paperwork
Successfully filing your Certificate of Formation does not mean you are through with your responsibilities. Your company still has obligations with the state.
First, check if you need to secure a business license. This is applicable for companies that actively transact inside the state lines, so you may have to get one if you are selling goods and services within the state. In this case, you can register with the Department of Revenue online. Doing this will register your business with the Division of Revenue, the Division of Unemployment Insurance, and the Office of Workers Compensation. You may also need a credit card and an Employer Identification Number (EIN) for the form.
Second, you should pay taxes for your Delaware LLC. The annual tax is $300. You can pay for this fee online on the website of the Division of Corporations. The tax is due every June 1. Late filings come with an additional $200 penalty. It will also accrue interest at a rate of 1.5% for every month you are late.
Unlike other states, Delaware does not impose taxes on intangible properties. It also does not require LLCs that do not conduct business in the state to pay for income tax. Additionally, it does not have a sales tax for goods and services.
Starting your business in Delaware is an exciting adventure. However, the process you will have to go through can be stressful. If you think you may need help in getting through every step without hassle, consider hiring a third-party organization like DoMyLLC. Our team of experts can provide live support and personalized solutions. Additionally, we can serve as your registered agent and help you out in ensuring compliance with state requirements.
Business Filing Section