Forming an LLC offers numerous benefits, especially for tax purposes. Limited liability companies are business structures in the United States where the owners are not responsible for any of the debts or liabilities of the company. With characteristics of both a corporation and a partnership or sole proprietorship, it is somewhat of a hybrid entity.
One important aspect of forming an LLC is deciding on the structure between a single member LLC or including other owners with a Multi-Member LLC. Another crucial step is creating an operating agreement, which, although not mandatory, outlines the ownership and operational structure. Additionally, there are specific laws in every state that govern the formation cost for an LLC. State filing fees typically range between $40 to $500, with the average filing fee for an LLC in the United States being $132. Requirements also include taxes and ongoing obligations such as filing an annual report to maintain compliance.
Forming an LLC in Delaware and maintaining it are relatively reasonable compared to other states. Despite the initial costs, the Limited Liability Protection and tax benefits often outweigh the expenses.
Although every state is different when it comes to how much is required to operate, there are always some types of LLC Fees and expenses required. Some of these fees are to start the LLC, while others are to maintain it. If you do not pay these fees, your LLC will be dissolved and you will have to pay to reinstate it if you wish to have limited liability protection.
Depending on the state that your LLC is formed in the fees will vary. Despite this, Delaware has been known as a state that is beneficial to form in, primarily for tax purposes.
If you want to start an LLC in Delaware, it does cost money. Although Delaware is a very LLC friendly state, businesses are required to pay a fee before processing and handling state documents.
These are a few of the fees Delaware LLC owners are required to pay.
In order to establish an LLC you must file articles of organization, also known as certificate of formation or certificate of organization. In Delaware, it will be filed with the Division of Corporations, and the fee to file articles of organization is $90. The LLC filing fee is a one-time fee paid to the state to form your LLC.
Every LLC is required to have a unique name in the state of formation. This means you will need to pick something that represents your LLC but is also individual. In Delaware you can put in a name reservation application to save your name before you officially file, the cost is $75.
If you wish to operate your LLC under a different legal name than what is listed in your articles of organization you can do so. This is called a DBA, or “doing business as” name. It is optional, the cost is $25.
LLCs aren’t off the hook after paying their initial startup costs, they also have to pay annual fees to stay in good standing with the state.
The LLC annual fee is paid each year to the state of Delaware. It is required in order to keep your LLC in compliance. In the state of Delaware, it is paid every year and is $300.
In some states, an LLC is required to pay a reporting fee along with an annual fee. This will also come along with a franchise tax. In the state of Delaware, there is no annual reporting fee.
Every LLC must have a registered agent for service of process in the state. Although this can be the owner or an employee, it can also be a business that specializes in acting as a registered agent. It is important because they need to accept legal papers on the LLC's behalf if it is sued. They will most likely charge a fee to act as your registered agent.
Forming your Delaware LLC offers numerous advantages, especially for tax purposes. While there are fees associated with LLC establishment and maintenance, Delaware's LLC-friendly environment makes it an appealing choice. Start your Delaware LLC today, and if you need assistance, contact us via the provided contact form or call +1 (307) 683-0983 to speak with one of our experienced Business Success Advisors.