What are the benefits of a Delaware LLC, and what makes a Delaware LLC so easy to manage and operate?
There are a number of reasons a Delaware LLC is uncomplicated to form and maintain. The Delaware LLC is well-known for its unmatched flexibility and low maintenance requirements.
First, creating an LLC is simple and straightforward; all you have to provide is your company name, your contact information and the names of the members of the LLC.
The state of Delaware does not require the names of the members to be listed on the Certificate of Formation where it would be available on public record.
Once your LLC is up and running, eventual changes in ownership or membership are easy to facilitate. You can add or remove members of the LLC via your LLC Operating Agreement. The LLC Operating Agreement is a written agreement between the LLC’s members that addresses the ownership, management and responsibilities of all the members and managers of the LLC.
The LLC Operating Agreement is an internal matter and is not required to be filed publicly. The annual reporting requirements for a Delaware LLC are simple and direct.
All you have to do is submit a $300 Franchise Tax (the Franchise Tax amount is the same for all Delaware LLCs), which is due on or before June 1st of each year, regardless of the amount of income your LLC generates.
There is no annual report required when filing the Franchise Tax for a Delaware LLC. This is much different than the annual requirements for a corporation—all Delaware corporations must file an annual report consisting of an updated list of the names and addresses of all officers and directors, updated shareholder information, updated gross assets and updated issued shares.
As you can see, when compared to a corporation, the Delaware LLC is significantly easier to maintain, with much less paperwork and, therefore, much less stress.
In addition, Delaware LLCs include asset protection against liability and creditors. They also carry a distinct tax advantage in that owners can decide, upon formation, how they want the LLC to be taxed by the IRS—as a partnership, an S corporation, a C corporation or a sole proprietorship.
Delaware LLCs are, in a word, extraordinary; when you compare them to other business entities, none of which include the level of privacy, flexibility or cost-efficiency, it is easy to see why two-thirds of all companies formed in the state of Delaware are LLCs.
If you have any questions about forming a new Delaware LLC, feel free to contact us 800-345-2677, Ext 6133 or email me at firstname.lastname@example.org.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.
There are 2 comments left for Benefits of a Delaware LLCAsuzu kingsley chinedu said: Monday, July 9, 2018
Very very educative and informativeHBS Staff replied: Tuesday, July 10, 2018
We're glad you found our blog helpful. Thanks for reading!Svante Johansson said: Monday, September 21, 2015