Delaware LLC benefits range from privacy, taxes, and ease of formation. However, the most important benefit that Delaware offers LLCs is a business-friendly environment with a pro-business legal framework.
For these reasons, anyone looking to register an LLC in the United States should consider Delaware as an option. However, it is important to compare all of the available options.
In this article, we’ll take a closer look at registering an LLC in Delaware and answer common questions we receive on the topic.
This article is part of our free series on forming US LLCs, including the steps for opening a business bank account for an LLC, which you can access here.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Delaware LLC Benefits
- How to Setup a Delaware LLC?
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
Delaware LLC Benefits
Delaware LLC benefits are the result of formation in a business-friendly state, with strong legal protection thanks to business-oriented corporate law through the Court of Chancery. Additionally, Delaware also offers privacy protection, tax advantages, and flexible operating agreements.
However, Delaware’s business reputation and streamlined filing process make it one of the most popular business formation options available. For these reasons, the Delaware Limited Liability Company, is one of the most popular options in the United States, despite annual franchise tax and high registered agent fees.
Here is a closer look at a few of the benefits you can receive when forming an LLC in Delaware. Depending on the benefits you’re after, you might consider forming an LLC in Wyoming and tap into the Wyoming LLC pros instead. If you want to compare the benefits of forming an LLC in Delaware to Wyoming, you can access our free guide linked above.
Privacy Protection Benefits
Delaware offers privacy protection and offers the owners of LLCs anonymity.
State Tax Advantages
Delaware has no-state income tax for out-of-state business activities and no sales tax.
Simple Startup and Minimal Requirements
Delaware is an easy and reputable option for individuals looking to form an LLC in the United States.
How to Setup a Delaware LLC?
To register a Delaware LLC, you will need to complete the official registration process with the Delaware Division of Corporations. If you are a non-resident of Delaware, you will be required to appoint a local registered agent. If you are a local resident of Delaware, you can be an agent of an LLC.
After a local agent is appointed, the registration process involves reserving a name, filing a Certificate of Formation, and paying the necessary filing fee. On an ongoing basis, your Delaware LLC will also need to pay an annual tax. However, there is no annual reporting requirement.
Here is a closer look at the required steps to register a Limited Liability Company in Nevada as a non-resident.
Delaware LLC Incorporation Process
- Appoint a Delaware registered agent
- Reserve a name for your LLC
- File Certificate of Formation with the Delaware Division of Corporations
- Pay the associated filing fee at the time of filing the Certificate of Formation
- Prepare the operating agreement for the LLC
- Obtain an Employment Identification Number for your Wyoming LLC
- Pay the annual tax on an ongoing basis
- Meet any related federal filing requirements from the IRS
How to Obtain a Business License in Delaware?
First, a Delaware business license is only required if an LLC is carrying out business within the State of Delaware. If an LLC is not conducting business in Delaware, it is not required to obtain a business license.
On the other hand, if a business is engaged in trade or business activities in the State of Delaware, it must obtain a Delaware business license from the Delaware Division of Revenue.
Here is a closer look at how to obtain a business license in Delaware:
- Confirm the type of license required
- Contact the Delaware Division of Revenue to receive the related application
- Complete the application documents
- Pay the related fees at the time of submitting the application documents
- Wait for the processing of the application to complete
- Comply with ongoing reporting and renewal requirements
Alternatively, if you’re searching for banking solutions for an internet-based business or the best bank for an e-commerce business, you can use our free guide that is linked here to help you get started.
If this is your first time visiting GlobalBanks, don’t forget to download your FREE US Banking Starter Guide. It’s designed to help non-residents with opening bank accounts at top financial institutions in the US.
Frequently Asked Questions
Below are four of the most common questions we receive from people looking into the Delaware LLC benefits. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
What Are the Advantages of an LLC in Delaware?
The primary advantages of forming an LLC in Delaware are derived from the local regulatory, tax, and legal environment offered by the state of Delaware. Delaware is one of the most business-friendly states in the USA. This includes offering a strong pro-business legal environment and favorable tax structures, including no-state tax on out-of-state business activities. Delaware also offers privacy and allows business owners to maintain a level of confidentiality.
Why Is Delaware the Best State to Form an LLC?
Delaware is not the best state to form an LLC. In fact, in many cases, Delaware is not the ideal choice for individuals. This is especially true for anyone looking to form an LLC that does not intend to raise capital in the future. Instead, lower-cost options like Wyoming may be more appropriate. However, in all cases, individuals should consider all of the available options and then weigh the pros and cons of each.
Is It Worth It to Have an LLC in Delaware?
Whether it is worth it to have an LLC in Delaware will depend on your future plans for the LLC, your intended use of the LLC, and your priorities when forming an LLC. Additionally, an important consideration is whether other options, like Wyoming, that offer lower-cost setup and maintenance could offer the same value at a lower cost. In all cases, we suggest exploring the options available and choosing the one that best meets your needs.
Why Is Delaware LLC so Popular?
Delaware LLCs are so popular because Delaware is one of the most business-friendly states in the United States. This pro-business environment is then supported by a strong regulatory body and business-oriented court system, known as the Court of Chancery. Of course, Delaware also has favorable tax laws, including no income tax on out-of-state activities and no sales tax. These advantages, particularly the supportive court system, have made Delaware the most popular choice for large corporations, venture capital-backed companies, and more.
Ready to Open Accounts With Banks in the USA?
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And “yes!” GlobalBanks USA helps foreigners and non-resident individuals open bank accounts.
In fact, GlobalBanks USA even helps non-resident US LLCs and foreign & offshore entities.
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