The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
Unfortunately, not all businesses are successful. Maybe the initial funding did not come through. Possibly there was too much competition for the business to survive. Or perhaps the business owner just got tired of dealing with all the headaches and is ready to close up shop. Every day clients contact us because they no longer want their company and they want to know how to close a business.
In order for an entity to be formally closed with the state of Delaware, a certificate needs to be filed with the secretary of state’s office. For a corporation, it is called a certificate of dissolution. For a limited liability company, it is known as a certificate of cancellation. Just as a certificate of incorporation/formation was filed when the entity was formed, an official filing needs to be submitted to the Delaware secretary of state to legally close the entity.
In addition to filing the certificate of dissolution/cancellation, all outstanding and current franchise tax fees must be paid. This means if the entity owes any past due franchise tax fees, these amounts must be brought up to date. Also, the state of Delaware will require the current year’s franchise tax assessment be paid when the entity is formally closed. The current year’s franchise tax fees are not pro-rated within the year; so the same amount of franchise tax fees will be imposed regardless if the entity closes in January or December.
The actual amounts due will vary depending on the company type (Inc versus LLC), the stock structure (minimum stock versus maximum stock) and such. Therefore, if you are curious how much it would cost to close your entity, simply contact our office and we will gladly provide a price quote.
You should also discuss the situation with your accountant and your attorney to determine your entity’s internal details that will need to be attended to upon termination. Also, you’ll need to contact the IRS and send them a copy of the filed certificate to end your tax liability. Of course, closing your business can be disappointing, but we will help make the process as quick and simple as possible.
Photo Attribution: Nicholas Eckhart/flickr
You may be familiar with the numerous benefits and protections offered by Delaware’s strong corporate law structure from personal experience. It may have been recommended by your attorney or tax professional, or maybe you've done your own extensive research online.
The fact is, Delaware is well-known as the “Incorporation State” for both small businesses and large corporations alike. The state of Delaware offers the strongest corporate law structure, bar none. The question is, who can form an LLC in Delaware?
“I don’t live in Delaware, can I form a Delaware LLC?”
This is, by far, the most frequently asked question we hear. The answer is, yes, anyone in the world can form a Delaware LLC!
The state of Delaware does not restrict non-U.S. residents from owning or managing Delaware LLCs, nor do they require any physical presence in the state of Delaware, or even within the U.S., for that matter.
Delaware simply requires that you maintain a registered agent, such as Harvard Business Services. As the Registered Agent, we are responsible for all official correspondence from the Division of Corporations, as well as service of process.
Harvard Business Services currently acts as the Registered Agent for more than 57,000 Delaware companies.
When forming an LLC in Delaware, there is only one document that needs to be filed with the state—the Certificate of Formation. Delaware is unique when compared to most other states, as the information required (and available for public record) is minimal.
The Certificate of Formation must include the name of the Delaware LLC and the name and office address of the registered agent. The names of the members or managers are not required to prepare, execute, or file the Certificate of Formation. However, this must be handled by an authorized individual or company, such as Harvard Business Services, Inc.
Upon your authorization, we’ll prepare and file the certificate of formation with the Secretary of State. Once the filing is approved by the state of Delaware, we’ll release the LLC to the initial member(s) or manager(s) via the "Statement of the Authorized Person." We will prepare and execute this document for you. It is not provided to the state of Delaware and is not part of public record.
From this point on, traditionally, any membership or management changes in the LLC are handled within the LLC Operating Agreement. If the company opens a bank account or has U.S. source income, clients will work with a tax professional to determine their tax filing requirements in the U.S.A.
Reach out to one of our top-notch customer services representatives today via phone (800-345-2677), email, or live chat if you have any questions about setting up your Delaware LLC. We’re ready to help.
People from all over the world form Delaware corporations every day. This is attributed to the popularity of Delaware’s corporate law structure, which has been ranked No.1 in the world.
By forming a company in Delaware, business owners are able to benefit from this corporate law structure.
When operating a Delaware corporation or LLC in Illinois, your company will be labeled as a foreign entity.
While a Delaware company can operate all over the world, there are often additional steps to make sure your Delaware corporation is compliant in the state in which it is operating—in this case, Illinois.
This process is called Foreign Qualification. It is another way of saying that Illinois grants you permission to operate there with a Delaware corporation. In order to run a Delaware company in the state of Illinois, you will need to file for Foreign Qualification in Illinois.
There are a few requirements to register a Delaware corporation in Illinois as a foreign entity. Illinois, like most states, has an application process and a state filing fee.
Along with the Application for Authority and the state filing fee, Illinois also requires a certified copy of your Articles of Incorporation, along with any mergers and/or amendments from Delaware. These documents from Delaware can be no more than 90 days old.
An authorized officer will need to sign the application; however, the signatures do not need to be originals. We would be happy to prepare the application for you. We will prepare the documents, obtain the certified copy of your Articles of Incorporation from Delaware and email the package to you for signature.
We will then file it with Illinois, along with the state fee. The typical turnaround time is 10 business days. We can also act as the Registered Agent in Illinois for $99 per year.
Once you register a Delaware corporation for Foreign Qualification in Illinois, you will be responsible for the state's annual reporting requirements. The Illinois annual report is due the day before the first day of your anniversary month. There will also be a minimum Franchise Tax of $25 due.
For assistance in registering a Delaware corporation for Foreign Qualification in Illinois, please call 1-800-345-2677, Ext. 6130 or email firstname.lastname@example.org.
Have you ever thought about starting a business in the U.S. but are not sure if it’s possible, complicated, or easy? Setting up a U.S. company is actually not very complicated or expensive, you just have to follow some easy steps and understand a few basic concepts. Often clients think they need an attorney to explain this to them, but in reality they are charging you hundreds of dollars per hour. Instead you could take this online course to learn the same information.
Offered through Udemy.com, the course is 90 minutes long, can be completed at your leisure, and contains the following information:
So if you don’t live in the U.S. but want to learn how to set up your own U.S. company, this great course will teach you just that without ever having to travel to the U.S. This special set of lectures have been specifically prepared for foreign entrepreneurs.
By the end of the course you will learn the following:
The course is currently offering a special Harvard Business Services discount of 50 percent off, making the overall cost $98. (Follow this link for the reduced price.) Once you’ve finished the course, you can go to our easy-to-use online order form and have your company set up in just a few minutes!
We are continuing to add more features to our website in order to make things easier for our clients. Many of our clients have asked us to create an online order form to renew and sign up for our Delaware mail forwarding service and to offer more mail services, so we listened.
We are pleased to announce that you can now go directly to our mail forwarding page and sign up for one of our services!
We have more than 1,000 clients that have signed up for this unique service with us. Here are some of the many benefits that they enjoy:
• Weekly Forwards
All incoming business mail is collected, placed into a single envelope, and forwarded the same day, next business day, or at the end of the business week, depending on the service you select.
• Scan-to-Email Forwarding
We offer you the option to have your mail scanned and emailed to you, rather than physically mailing it to you.
• Postage Included
With the exception of the Courier Mail Forwarding Service, reasonable postage is included for the forwarding of business letter mail.
• Junk Mail Removal
We remove and destroy all junk mail received, saving you time and money.
• Unlimited Address Updates
If your address changes at any time, you may update it with us at no additional charge.
• Incoming Couriers Are Accepted
Unlike most mail forwarding services, we accept and sign for any letters received by courier services such as UPS, FedEx, and DHL.
• No Lengthy Forms
There is no requirement for you to fill out lengthy forms.
• Travel Without Worry
When you travel, you may provide us with a temporary address to forward your incoming mail. You can specify the date you need the address to be reversed, and we will perform this seamlessly.
• Flexible Options
We offer affordable and flexible options to meet your needs based on your incoming mail.
Please note that signing up for our mail forwarding services does not permit you to use our address on any U.S. IRS forms, license or RFP applications, or to list it as your physical business address. However, you may use our address on your letterhead, business cards, website (as long as it is listed as a mailing address), invoices, and as a return address if you subscribe to our service.
Lastly, please note that you cannot sign up for our mail forwarding service unless you are a current client of Harvard Business Services.
So if you are up to your ears in mail, travel a lot, don’t have a physical mailing address, or just don’t have time to go through and throw out all the junk mail you receive, let us take care of your mail and be assured that it will be delivered to anywhere in the world that you specify. To sign up, simply to our mail forwarding page.