Delaware Limited Liability Company (LLC) is the most common type of business entity registered in Delaware. According to 2020 annual report statistics published by the Secretary of Delaware, the business entity accounts for around 72% (180,376 LLCs) of all active business entities in the state.
For most entrepreneurs who are planning to incorporate in Delaware, the documentation process is considered the most concerning part. Let’s dive deep into the filing process with a checklist of required documents for Delaware LLC formation.
- What to do before the Delaware LLC filing
The first thing you need to do is choose and maintain a registered agent or representative. The agent will work on behalf of your company to receive notices and legal documents from the Secretary of the state. A registered agent can be an individual or a business entity. Your company can act as a registered agent itself if it has an official physical address in Delaware.
One thing you need to do before the registration is to understand the corporate structure for the appointment and drafting an operating agreement for your Delaware LLC in an appropriate manner (LLC Operating Agreement is optional, but recommended). The LLC is managed by managers and members with an unlimited number of members. At least one member is required to provide for the company registration.
- Required documents for Delaware LLC registration
2.1 Documents need to be prepared for the filing process
There are three main steps to form a Delaware LLC with certain requirements regarding document preparation:
Step 1: Choose the Name for Your Delaware LLC following the Delaware LLC Act
You can check the name availability and reserve the desired name in the state’s online system to avoid being taken away by other businesses.
Step 2: Submit a Delaware Certificate of Formation for LLC
This is the most important stage in terms of the documentation process. To obtain the certificate, you need to fill in the form of Delaware formation certificate and submit it to the Division of Corporations.
Below are required information for the form:
- The name of your limited liability company in Delaware
- The name and address of the registered agent of your Delaware LLC
For the registration of LLC other than a traditional LLC such as foreign LLC, you need to fill in respective forms provided by the state.
Step 3: Receive the Result
The result will be received usually within 3 – 4 days. It can be processed faster with an additional fee. You will receive a stamped Certificate of Formation, which means your company is successfully registered in Delaware.
2.2 Post Delaware LLC registration: other considerations
Get a Delaware Employer Identification Number (EIN) for Your LLC
An EIN, also known as FTIN (Federal Tax Identification Number), is the identification number of your Delaware LLC. The number is required for opening a corporate bank account and hiring employees in the US.
You can do the application online via the website of the Internal Revenue Service (IRS). The application can also be done by filling in form SS-4. It is important to gather all possibly required information for the application:
- Personal information of at least one company member (legal name, legal address, and social security number)
- The LLC name and its operating address
Apply for Additional Licenses and Permits
In the US, business licenses and permits are usually required to be obtained for lawful business operations. Failing to the complicanes may lead to monetary penalties, criminal penalties; or the company can even be forced to discontinue activities.
There are three tiers of authority requiring the licensed registration of Delaware LLC (if applicable), which are federal, state, and local levels. You can apply for the business licenses and permits using the One Stop Business Licensing and Registration Service for online registration or the paper Combined Registration Application Form (Form CRA).
Each type of business license and permit usually has an expiration date. Keep track of the validation time to maintain the renewal before it expires to ensure legal business operations.
Design your LLC’s Delaware Operating Agreement
Operating Agreement, also known as Operating Records, includes all information of Delaware LLC such as:
- Organization establishment and ownership
- Duties and rights
- Capital matters
- Distribution of profits and losses
- Membership change
- Company dissolution
The agreement can be in written or oral form with consent of all members of the LLC. The written form is an advisable option for convenient management and some other purposes such as asking for funding or opening a bank account.
Open a Bank Account for Your Delaware LLC
A bank account is needed for Delaware LLC to manage all business transactions in Delaware. To open a bank account in the state, here are required documents and information:
- Proper photo identification, such as a driver’s license or passport
- Certificate of Incorporation (for corporations) or Certificate of Formation (for LLCs), stamped by the Delaware secretary of state
- Articles of Incorporation (for corporations) and Articles of Organization (for LLCs) are included in the respective certificate above.
- The Operating Agreement, if the company is an LLC
- Federal Employer Identification Number (EIN)
- Banking resolution with corporate seal
The documentation for Delaware LLC formation is usually quite complicated for an entrepreneur. Preparing all documents you need for the registration is crucial. However, the difficulties during the process are usually unavoidable. BBCIncorp is available to help with your difficulties. Check out our Delaware company formation services.