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The Delaware LLC is a unique business entity; some of its uniqueness stems from the fact that the state of Delaware requires very little information about the LLC to be divulged before, during or after the creation of the LLC.
Many people are amazed at the miniscule amount of information the state of Delaware requests in order for people to create a new Delaware LLC. We are happy to share our experience and knowledge and discuss why the Delaware Division of Corporations requires so little information in order to create an LLC, and why this is beneficial to business owners.
In most states, the company's purpose is required to be listed on an LLC's Articles of Organization as well as the LLC's Certificate of Formation. Chapter 18 of Delaware's Limited Liability Act states, "A limited liability company may carry on any lawful business, purpose or activity, whether or not for profit [...]," which means the LLC is free to conduct any type of lawful business activity without having to publicly list its purpose on the company's Certificate of Formation.
While other states require a list of all the members' names and addresses to be included on the filing to create the LLC, the state of Delaware only requires the name of the LLC and the Registered Agent's name and address to be listed on the Certificate of Formation.
Most states require the principal place of business to be listed on the LLC's Certificate of Formation; however, this is not a requirement when creating a Delaware LLC—the principal place of business of a Delaware LLC does not have to be listed on the Certificate of Formation.
When creating a new LLC in Delaware, you do, of course, have the option of listing the purpose of your LLC, along with the members' names and addresses, as well as the LLC's principal place of business. However, doing so can prove to be very expensive later in the life of the company.
For example, should the Delaware LLC want to branch out and delve into a different type of business, an amendment must typically be filed in order to update the purpose of the company.
Should the member(s) change, or the address of a member change, another amendment usually needs to be filed in order to update this information. The same holds true if the principal place of business should change.
Sometimes in life, the less we explicitly state, the better off we are, and this certainly holds true in the formation of a new Delaware LLC. Why put the purpose, name(s) of the member(s) or the principal place of business on the initial LLC filing if you do not have to?
The cost for filing an amendment in order to update the information is $200, so why bother listing the information in the first place if it is not required? If you don't list the information, you won't need to change it; this can help you save hundreds, even thousands, of dollars throughout the life of the company.
Unlike many other business formation services, we do not list any additional information on the Certificate of Formation, other than what the state of Delaware mandates.
Feel free to contact me, or any of our expert customer service representatives, with any questions or concerns you may have about forming a Delaware LLC. You can call me at 800-345-2677, email me at email@example.com or talk to me via LiveChat.
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.