The State of Delaware in the USA is considered to be a leading hub for business owners. Not only for the U.S. domiciles but also for the international business entities. Delaware possesses the most business friendly laws that provide businesses legal benefits. LLC Incorporation in Delaware, USA is easy and hustle-free too. In this article let us discover step by step procedure for LLC Formation in Delaware including the reasons why one should go for LLC Incorporation in Delaware.
What is LLC Incorporation?
LLC stands for Limited Liability Corporations. It is a combination of both the Corporation and Partnership Firm. LLC has credibility and limited liability that one can generally sough in a corporation and flexibility and pass-through taxation that are the main characteristics of a Partnership.
Benefits of starting an LLC in Delaware
The Most Business Friendly laws
Delaware in the USA amongst all other states has the most business friendly laws in the USA. The foundations of those laws are the Delaware Corporation Law and the Limited Liability Company Act which are the most updated statutes so as to ensure that the businesses in Delaware have the most clear and consistent legal systems.
Flexibility of Management Structure
Delaware LLC Members have the flexibility to decide the management structure for themselves. They have the liberty to decide to manage the LLC by themselves or they can appoint the managers to do it for them. Delaware law offers the LLC flexibility in deciding the powers and the duties of the members of the management committee.
Confidentiality remains intact for members and managers
When one forms and LLC in Delaware, he does not require to disclose the name and the address of the managers or the team members in the formation documents. While in other states, one requires to mention these details in the formation documents that becomes the public record. This makes it easier for the general public to find out what a member owns.
In Delaware, an LLC certificate of formation only needs to provide:
- The name of the LLC
- The name and address of the Delaware registered agent
Limited Liability of the owners to Delaware LLCs
It is one of the major advantages of an Delaware LLC that is provides the owners with the liability protection. That means, when someone wins a law suit against a properly formed LLC, the liabilities are enforced against the property of the LLC and not the personal property of the members of the LLC.
Benefits of Tax for Delaware LLC
Tax laws in Delaware are also such that it proves to be beneficial for most of the businesses in the state. The LLC in Delaware needs to pay no income tax if the LLC doesn’t do business in Delaware. Also, there would be no sales tax payable if the LLC doesn’t do business in the state.
Procedure to start an LLC in Delaware
Reserve the Name for your LLC in Delaware
The first step towards registering your LLC in Delaware shall be to reserve the name for your Limited Liability Corporation. The Delaware Division of Corporations allows the LLCs to reserve an entity name. However, this is not a mandatory requirement for incorporating an LLC, reserving your name will guarantee that the name of an entity is reserved for a period of 120 days.
Hire a Registered Agent
The second step towards LLC incorporation in Delaware would be to hire a Registered Agent. A Registered Agent can be an individual or a business entity who shall be responsible for all the correspondence related to tax forms, legal documents and shall also work as an official government correspondence on behalf of the business. It should be kept in mind while hiring a Registered Agent that he must be resident of Delaware or a corporation authorized for carrying out any business transactions in Delaware.
File Certificate of Formation with Delaware Division of Corporations
The next step would be to file the certificate of Incorporation of an LLC with the Delaware Division of Corporations. This Certificate can be filed either online by yourself or via mail. Once the Certificate of Formation of an LL is filed and accepted by the Delaware Division of Corporations, the LLC is considered to be officially incorporated.
Delaware LLC Operating Agreement
LLC Operating Agreement is not mandatory for a Delaware LLC, but it is advisable to have one. An Operating Agreement is a legal document that sets out the provisions of the ownership and operating procedures of an LLC. It reduces the risk of future conflict between the business owners.
Get an LLC EIN
EIN is an Employer Identification Number which is a nine digit number given by the IRS (Internal Revenue Service). EIN number is a Social Security Number for a business. An EIN is required for opening a business bank account, filing and managing Federal and State Taxes and also it is required while hiring employees.
Documents required for LLC Incorporation in Delaware
- Legal Name of Partners
- Percentage of partnership for each partner
- Address and DOB of the partners
- Copy of Aadhar Card
- Copy of PAN Card
- Copy of Driving License
- Original or Certified copy of Passport needs to be sent to IRS for ITIN
FAQs on LLC Incorporation in Delaware
What is the government fees for LLC registration process?
One time LLC formation State fees in Delaware is $90.
Will you provide help in opening a bank account in Delaware?
Yes, if needed we will help you with opening a bank account in Delaware. We will also help you with the Virtual Address and Registered Agent in the state of Delaware.
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