Learn how to establish an LLC in Delaware by following these simple steps.
Most Fortune 500 companies have established their corporations in Delaware. Since then, they have enjoyed bountiful benefits like corporation-friendly state laws, cheaper filing fees, and privilege of applying for incorporation even without a physical address in Delaware. When you decide to incorporate in Delaware, you will realize how vast the benefits are but before you can do so, you must find out how to form an LLC in this state.
Steps to Follow
First, you have to choose your business type. Identifying the nature of your business is essential in determining all the steps needed to be taken in order to formalize your intent to incorporate. Take note that when you have already started a business of a certain type, you cannot incorporate it under another nature, unless you are willing to establish a new company profile. In that case, it would be impractical and overly expensive. When you have finally decided on this aspect, you can proceed by hiring an attorney or a Certified Public Accountant who is well-familiar with Delaware Corporation Law. Your lawyer shall advise you of the next procedures and shall represent your company for the approval of your incorporation.
Secondly, you need to hire a Delaware agent. Remember that you must not confuse hiring an attorney and a Delaware agent since the two have completely different roles in processing your incorporation. A Delaware agent is a person authorized by the government to conduct business within the state. He acts as your representative while you operate business outside Delaware. He receives documents, signs papers on your behalf, and meets with authorities when your corporation is involved in any legal matter. It is important that the agent is well-informed of the basic information of your company, although it is not a requirement; it might be completely risky to divulge confidential data to your Delaware agent.
After this, you have the option to reserve a name for your corporation. This is not a mandatory requirement but you can reserve an entity name online. There is a one-time fee of $75 that will serve as your guarantee that your corporation’s name shall be on-hold within 120 days. If after that allotted time you have not formally filed an incorporation petition or have not submitted the requirements yet, your name reservation will be forfeited and it will become available again to other applicants. During the 120 days period, you must be able to secure your certificate of incorporation or formation forms and submit them for filing. You have the option whether to submit the documents personally, send it through fax, or have your agent do it. You also need to submit certificate of good standing especially for newly-applied business entities. This is to guarantee the reviewing committee that your company is not involved in any misdemeanor in the past.
When you incorporate in Delaware, you also need to abide by the taxation rules wherein all tax filings must be accomplished on or before June 1 of each fiscal year. You also need to settle a franchise tax fee that is relatively cheaper than other states.