Benefits of Starting an LLC in Delaware
Delaware has earned its reputation as the most business-friendly state in the country, and that extends well beyond large corporations. Here is what makes a Delaware LLC particularly attractive for business owners.
Anonymous LLC Formation
Delaware does not require you to list member or manager names on your certificate of formation, giving you a level of ownership privacy most states simply do not offer.
Series LLC Option
Delaware pioneered the series LLC structure, letting you create separate “series” within a single LLC, each with its own assets, liabilities, and members, without filing additional entities.
No Sales Tax
Delaware charges a 0% state sales tax rate, which can be a meaningful advantage if you sell goods or taxable services.
Business-Friendly Court System
The Delaware Court of Chancery specializes exclusively in business disputes, offering faster resolutions by experienced judges rather than juries.
Quick Facts About a Delaware LLC
1Name Your Delaware LLC
Your LLC name must be distinguishable from every other business entity on file with the Delaware Division of Corporations. It must include the words “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.”
Delaware gives you some flexibility. You can also use “Ltd. Liability Co.” or similar variations. However, certain words like “Bank,” “University,” or “Insurance” may require additional documentation or licensing.
Before you commit to a name, run a search through the Delaware entity name search to confirm availability.
If you are not ready to file right away, you can reserve your desired name for 120 days by paying a $75 fee to the Division of Corporations.
Yes. You can file a Certificate of Amendment with the Delaware Division of Corporations to change your LLC name. There is a filing fee, and the new name must meet the same distinguishability and formatting requirements as the original.
2Choose a Delaware Registered Agent
Every Delaware LLC must designate a registered agent with a physical street address in the state. The agent accepts legal documents, including service of process and state correspondence, on your behalf. P.O. boxes do not qualify.
Your registered agent must be an individual who resides in Delaware or a business entity authorized to operate in the state. The agent must be available during normal business hours.
You have three main options:
- Be your own registered agent if you have a physical Delaware address and can reliably be available during business hours. This is free but ties you to a specific location.
- Appoint a friend or colleague who lives in Delaware. This works but means their name and address become public record.
- Hire a professional registered agent service. This is the most common choice, especially for out-of-state owners. Professional services typically cost $100 to $300 per year and keep your personal address off public filings.
Since Delaware allows anonymous LLC formation, pairing that privacy with a professional registered agent ensures your personal information stays off state records entirely. You can compare Delaware registered agent services to find the right fit.
Yes. Delaware law requires every LLC to maintain a registered agent with a physical address in the state at all times. You cannot form or maintain an LLC without one.
Our Pick for Registered Agent
Northwest Registered Agent
Northwest provides a Delaware street address, scans and forwards all legal documents, and shields your personal address from public filings.
We recommend Northwest for their transparent pricing, privacy-first approach, and responsive customer support.
3File Your Certificate of Formation
The certificate of formation is the official document that brings your Delaware LLC into existence. You file it with the Delaware Division of Corporations. The filing fee is $90 whether you file online or by mail.
The certificate of formation itself is minimal. Delaware requires only:
- Your LLC’s name
- The name and address of your registered agent in Delaware
That is it. Delaware does not require you to disclose members, managers, or a business purpose on the formation document. This is what makes anonymous LLC formation possible here.
| Filing Method | Fee | Processing |
|---|---|---|
| Online | $90 | 3-5 business days |
| $90 | 2-3 weeks | |
| Expedited (24-hour) | $190 | 24 hours |
If you file by mail, send your completed certificate of formation to:
Mail Filing Address
Delaware Division of Corporations
401 Federal Street, Suite 4
Dover, DE 19901
If you would rather have a professional handle the entire filing process, you can compare Delaware LLC formation services to find one that fits your budget.
Want someone to handle all this for you?
ZenBusiness
ZenBusiness prepares and files your Delaware certificate of formation, handles compliance reminders, and gets you up and running without the paperwork.
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4Get an EIN for Your Delaware LLC
An Employer Identification Number (EIN) is a federal tax ID for your business. You need one to open a business bank account, hire employees, and file federal taxes. The IRS issues EINs for free.
Apply online at the IRS EIN Assistant and you will receive your number immediately. The application takes about five minutes.
5Create Your Delaware LLC Operating Agreement
Delaware law requires LLCs to have an operating agreement. This is not filed with the state. It is an internal document that governs how your LLC operates.
Your operating agreement should cover:
- Ownership percentages and capital contributions
- How profits and losses are divided
- Member voting rights and decision-making processes
- Rules for adding or removing members
- What happens if a member wants to leave or passes away
- Dissolution procedures
Even if you are a single-member LLC, an operating agreement is legally required in Delaware and reinforces the separation between you and your business entity. Without one, a court could view your LLC as an extension of yourself rather than a separate legal entity.
Yes. Delaware is one of a handful of states that legally require an operating agreement for all LLCs. While the state does not ask you to file it, you must have one in place. Banks, investors, and courts will expect to see it.
6Open a Business Bank Account
Open a dedicated business bank account to keep your personal and business finances separate. This is critical for maintaining your LLC’s liability protection.
Bring the following to the bank:
- Your filed certificate of formation
- Your EIN confirmation letter
- Your operating agreement
- A government-issued photo ID
How Much Does a Delaware LLC Cost
Here is every fee you may encounter when forming and maintaining a Delaware LLC.
| Item | Cost | Frequency | Notes |
|---|---|---|---|
| Certificate of Formation (online) | $90 | One-time | Standard processing in 3-5 business days |
| Certificate of Formation (mail) | $90 | One-time | Takes 2-3 weeks to process |
| Expedited Filing | $190 | One-time | 24-hour processing ($90 base + $100 expedite fee) |
| Name Reservation | $75 | One-time | Holds name for 120 days; optional |
| Registered Agent | $100 – $300 | Annual | If using a professional service |
| EIN | $0 | One-time | Free from IRS |
| Operating Agreement | $0 – $500 | One-time | Free if DIY; higher with attorney review |
| Annual Franchise Tax | $300 | Annual | Due June 1 each year |
| Delaware Business License | $75 | Annual | Required for all businesses operating in Delaware |
| Certificate of Good Standing | $50 | As needed | Requested when needed for banks or contracts |
Certificate of Formation (online)
$90 · One-timeStandard processing in 3-5 business days
Certificate of Formation (mail)
$90 · One-timeTakes 2-3 weeks to process
Expedited Filing
$190 · One-time24-hour processing ($90 base + $100 expedite fee)
Name Reservation
$75 · One-timeHolds name for 120 days; optional
Registered Agent
$100 – $300 · AnnualIf using a professional service
EIN
$0 · One-timeFree from IRS
Operating Agreement
$0 – $500 · One-timeFree if DIY; higher with attorney review
Annual Franchise Tax
$300 · AnnualDue June 1 each year
Delaware Business License
$75 · AnnualRequired for all businesses operating in Delaware
Certificate of Good Standing
$50 · As neededRequested when needed for banks or contracts
How Does Delaware Compare?
Delaware Filing Fee
$90
National Average
$127
Delaware’s $90 filing fee falls well below the national average. However, the $300 annual franchise tax is higher than the annual fees in many states, so factor ongoing costs into your decision alongside the low upfront price.
Delaware LLC Taxes
Delaware has a layered tax picture. The formation fee is low and there is no sales tax, but the state does impose income tax and a flat annual franchise tax that every LLC must pay regardless of revenue.
State Income Tax
Delaware has a state income tax. If your LLC earns income sourced from within Delaware, that income is subject to state taxation. However, if your LLC is formed in Delaware but conducts all of its business in another state, Delaware generally will not tax that out-of-state income. This is one of the key reasons out-of-state founders choose Delaware for formation.
Your LLC’s default federal tax classification carries over to Delaware. A single-member LLC is treated as a disregarded entity (taxed as a sole proprietorship), and a multi-member LLC is taxed as a partnership. You can elect S-corp or C-corp treatment at the federal level, and Delaware will follow that election.
Annual Franchise Tax
Every Delaware LLC owes a flat $300 annual franchise tax, due by June 1 each year. This is not based on income, revenue, or assets. It is a flat fee for the privilege of being organized in Delaware. Missing the deadline triggers a $200 late fee plus 1.5% monthly interest on the unpaid tax and penalty.
Sales Tax
Delaware has no state sales tax. This applies to all transactions within the state, making it one of only five states without a sales tax. You will not need to collect or remit sales tax on goods or services sold in Delaware.
By default, a single-member Delaware LLC is taxed as a sole proprietorship and a multi-member LLC as a partnership. Both are pass-through structures where income flows to the members’ personal tax returns. All Delaware LLCs also owe a flat $300 annual franchise tax regardless of income. There is no state sales tax.
After Forming Your Delaware LLC
Filing your certificate of formation is the beginning. There are several ongoing obligations you need to stay on top of to keep your LLC in good standing.
Annual Franchise Tax
Delaware does not require an annual report. Instead, your primary recurring obligation is the $300 annual franchise tax, due by June 1 each calendar year. You can pay it online through the Delaware franchise tax payment portal.
If you miss the deadline, you face a $200 late fee and 1.5% monthly interest on the outstanding balance. After three consecutive years of non-payment, the state will administratively cancel your LLC.
Delaware Business License
If you are conducting business in Delaware, you must obtain a State of Delaware Business License from the Division of Revenue. The general annual fee is $75 for the first location.
BOI Reporting
As of the March 2025 FinCEN rule revision, Beneficial Ownership Information (BOI) reporting only applies to companies formed outside the United States. Domestic LLCs, including those formed in Delaware, are exempt from BOI reporting requirements.
Federal Obligations
Regardless of your state requirements, your LLC must meet all federal tax obligations. File the appropriate IRS form based on your tax classification (Schedule C for disregarded entities, Form 1065 for partnerships, or Form 1120/1120-S for corporate elections). If you have employees, you must also handle payroll taxes, withholding, and annual W-2 filings.
No. Delaware does not require LLCs to file an annual report. However, you must pay a $300 annual franchise tax by June 1 each year. This is a flat fee, not based on revenue, and failure to pay can result in penalties and eventual cancellation of your LLC.
Dissolving a Delaware LLC
If you decide to close your LLC, you need to formally dissolve it with the state. Simply stopping business activity does not end your obligations. The $300 annual franchise tax will continue to accrue, and penalties will stack up until you officially dissolve or the state cancels your entity.
To voluntarily dissolve, file a Certificate of Cancellation with the Delaware Division of Corporations. The filing fee is $220.
Before filing, make sure to:
- Pay all outstanding franchise taxes and penalties
- Settle any remaining debts and obligations
- Distribute remaining assets according to your operating agreement
- Cancel your Delaware business license
- Close your EIN account with the IRS
Reinstating a Cancelled LLC
If your LLC was administratively cancelled for non-payment, you can reinstate it by filing for reinstatement and paying a $200 reinstatement fee plus all delinquent franchise taxes and accumulated penalties. Depending on how many years have passed, this total can add up quickly.
A Delaware LLC does not have a set expiration date. It exists indefinitely as long as you pay the annual franchise tax. If you fail to pay for three consecutive years, the state will administratively cancel your LLC, but you can reinstate it by paying the $200 reinstatement fee plus all back taxes and penalties.
Frequently Asked Questions
The minimum cost is $90 for the certificate of formation filing fee. Add $300 for the annual franchise tax due by June 1, $75 for a state business license if operating in Delaware, and $100 to $300 per year if you use a professional registered agent service. Expedited 24-hour processing adds $100 to the filing fee.
Online filings are processed in 3 to 5 business days with standard service. Mail filings take 2 to 3 weeks. If you need faster turnaround, Delaware offers 24-hour expedited processing for an additional $100.
Yes. Delaware fully supports single-member LLCs. There is no minimum number of members required. A single-member LLC is taxed as a disregarded entity by default, meaning income passes through to your personal tax return.
It depends on your situation. Delaware offers strong privacy protections, a flexible LLC statute, and a specialized business court system. However, if you physically operate your business in another state, you will likely need to register as a foreign LLC there as well, which means paying fees and meeting compliance requirements in both states. For most small business owners operating in a single state, forming in your home state is simpler and less expensive.
