Are you considering starting an LLC in Delaware? That’s a fantastic choice! Delaware is renowned for its business-friendly environment and advantageous tax laws. However, before you jump in, it’s crucial to comprehend the costs associated with establishing and maintaining an LLC in the First State.
LLC in Delaware Cost
It’s worth noting that while Delaware is a popular option for forming LLCs, it may not be the most cost-effective choice for every business. Take some time to explore alternative options, such as Wyoming, which we highly recommend as a top pick for LLC incorporation. To learn more about the differences between Delaware and Wyoming for LLCs, click here.
Remember, starting and maintaining an LLC involves more than just the initial filing fee. It’s important to budget for ongoing expenses to ensure compliance with Delaware law. Seeking guidance from a trusted advisor or attorney can help you navigate the process and gain a comprehensive understanding of the associated costs.
First, let’s break down the fees and costs associated with Delaware LLCs:
Filing Fee
When filing for incorporation, a $110 fee is required to be paid to the Delaware Division of Corporations. This fee covers the processing of your LLC formation documents.
While this fee is a one-time payment, you also have the option to pay an additional amount for expedited service if you desire a quicker approval of your application. If you choose to incorporate with EasyFiling, we will handle the payment of the filing fee and submit the necessary incorporation documents on your behalf.
Registered Agent
In Delaware, every LLC is required to designate a registered agent. This individual or entity will serve as the recipient for all legal and tax documentation on behalf of your LLC.
It’s important to note that each state has its own registered agent requirement. If you decide to register your business in multiple states, you’ll need to appoint a separate registered agent for each jurisdiction.
While it is technically possible to act as your own registered agent, this option is only viable if you reside in Delaware and can be available at the specified address during business hours. To simplify the process, most founders opt to use a registered agent provider, which helps avoid potential complications. At EasyFiling we offer comprehensive registered agent services starting at just $50 per year. Learn more about our services here.
Franchise Tax
All LLCs, regardless of their location, are obligated to pay Delaware’s annual franchise tax. This includes both LLCs that are based in Delaware and those registered in Delaware but operating in another state. It’s important to note that compliance with this requirement is mandatory for all eligible entities.
LLC franchise taxes in Delaware are a straightforward $300 per year, making it simple to include them in your budget. Unlike certain other states, Delaware does not impose a variable franchise tax on LLCs based on their revenue or profit.
The deadline for paying this tax is June 1st of the subsequent year. For instance, if you owe franchise tax for the year 2023, it must be settled by June 1st, 2024. Please note that late payments will incur a penalty of $200 plus an additional 1.5% per month.
What About Annual Reports?
If you’re a business owner, you might have questions about annual reports. However, unlike many other states, Delaware doesn’t have an annual report requirement for LLCs. As long as you take care of the expenses mentioned earlier, you won’t need to concern yourself with basic compliance matters.
However, it is crucial to acknowledge that these expenses merely cover the fundamental aspects of establishing and upkeeping an LLC in Delaware. Depending on your particular requirements, there could be supplementary expenditures, including business licenses, permits, and legal fees. For instance, a restaurant would need to undergo health inspections and ensure that its employees are well-versed in food safety practices.
Successfully managing a business entails unwavering attention to detail. As your company expands, it is crucial to stay on top of all compliance obligations.
Takeaways
Establishing a new business may seem like a daunting task, but it’s surprisingly simple and cost-effective. When you choose to incorporate with us, we handle all the paperwork and guide you through each step of setting up your company, ensuring a smooth and hassle-free process.
With a clear understanding of the associated costs, you are well-equipped to make an informed decision regarding the establishment of an LLC in Delaware. Take the next step by clicking the link below to initiate the incorporation process and commence the setup of your Delaware LLC today!
EasyFiling is here to assist you with your US company formation. In addition to helping you register a US company, we offer a wide range of services:
- LLC and corporation formation in Wyoming, Delaware, Florida, and other US states.
- Assistance with opening a US business bank account
- Expedited EIN application process
- Consultation for setting up Stripe/PayPal for accepting online payments.
- Guidance for setting up Shopify and Amazon FBA
Also read, Wyoming LLC Cost Guide: Complete list of costs associated with your Wyoming LLC.>>
Nabin Adhikari
