A Delaware LLC (aka Delaware limited liability company) is a type of business entity that is created by filing the proper Certificate of Formation with the Delaware Secretary of State.
The first Delaware LLC was formed on October 1, 1993 when the Delaware Limited Liability Company Act first made the LLC a legitimate business entity.
Currently, about two-thirds of all companies formed in Delaware are LLCs.
In 1998, 87,729 LLCs were formed in Delaware. That number increased to 145,630 in 2006. In 2014, the number of Delaware LLCs had grown to 168,966.
So why form a Delaware LLC? A Delaware LLC is an extremely flexible business entity with low start-up costs and an affordable Franchise Tax.
Owners typically choose to form a Delaware LLC if they want to start a company but have no plans to go public or issue shares of stock in their company.
LLCs offer members asset protection against liability and creditors, since a statutory limitation on personal liability means that LLC members cannot be held responsible for a sum higher than his/her initial investment in the LLC.
The Delaware LLC is a truly unique business entity in that the structure of the company and the rules that govern the members (owners) of the company are contained in a contract called the Operating Agreement, which is drafted by the company's members.
The structure of an LLC is more flexible than a corporation, in that the LLC members are free to organize the company in any way they see fit; the members can create all their own terms in order to govern, operate and oversee their LLC.
All of these terms are set forth in the LLC Operating Agreement, which can be amended over time if need be.
In drafting the LLC Operating Agreement, you have what lawyers call freedom of contract, which means, as the owner of a Delaware LLC, you have the freedom to tailor the terms and rules of your LLC to accommodate your specific business needs.
Once it is signed and agreed to by all parties, the Operating Agreement is legal and enforceable by all parties.
Customizable Operating Agreement templates are used by many LLCs as a starting point, but these templates can be modified to define any aspect of the company to best suit your situation.
Once you decide which tax status you want your LLC to elect, you merely fill out the proper IRS forms.
Keeping a Delaware LLC compliant is both easy and typically inexpensive. The only annual fees that are typically required are:
Forming an LLC in Delaware is easy with Harvard Business Services, Inc. If you are ready to form a Delaware limited liability company with us today, simply navigate to our form your Delaware LLC page. You can form a Delaware LLC in just a few minutes, and pay online with PayPal or any major credit card.
If you're still unsure about starting a Delaware LLC with us, these five reasons clarify why we are the leading Delaware business formation company and your best choice of a Delaware Registered Agent.
When you form your Delaware LLC through Harvard Business Services, Inc., our Corporate Kit, which is included in the Standard package, will provide you with an Operating Agreement to customize to your specific business needs. You can download a PDF of a single-member Operating Agreement here or a member-managed Operating Agreement here.
After forming your Delaware LLC, the next step is usually to obtain your Federal Tax ID Number. Then, you file for a Certificate of Authority in order to do business in your home state and open a business bank account. Below, you will find helpful information on all these topics, plus information on the annual LLC fees in Delaware.
The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, startups and general business topics.
Since 1981, Harvard Business Services, Inc. has helped form 130,170 Delaware corporations and LLCs for people all over the world.
Harvard can provide assistance throughout the life of your company. These custom services are the most popular with our clients: