Forming an LLC in Delaware (Preliminary information)
We have prepared a guide on the steps you need to take when forming an llc in the Usan state of Delaware. Delaware is among the most popular states for foreigners to start companies due to its business-friendly laws and entrepreneur-friendly lending and grant system.
Business owners in the state of Delaware a variety of incentives and loans, . For example, Delaware offers new businesses the opportunity to apply for an EDGE Grant . The EDGE Grant program provides great benefits to qualified small businesses in Delaware by offering them access to critical capital like never before.
The state hosts a wide range of companies, from the smallest start-up projects to companies on the Fortune 500 list.
To form an LLC in the state of Delaware, you must submit your certificate of formation to the Delaware Department of State. $90 must be paid to the state to apply for installation. After the process is completed, Certificate of Formation will be delivered to you. When you receive the document, your Delaware LLC company has been officially established.
The registered agent company from which you will receive support will submit the application document mentioned for installation to the state on your behalf during the installation phase. Thus, you do not need to take any extra action. To form your company, you can get online service from Northwest Registered Agent by paying the 39+ State filing fee.
Costs
| Service | Price | In installation | Annual |
| Fee to be Paid to the State During LLC Company Formment | 90$ | ✔ | – |
| Annual Filing | 300$ | – | ✔ |
- The state of Delaware has a flat annual tax of $300 each year called the Franchise Tax.
- In addition to the installation fee, do not forget to add the Northwest Agency fee of $ 39 to the cost.
- You can renew your Northwest agency fee next year for $125 (address included)
What is Registered Agent?
Agencies that provide services for entrepreneurs who do not reside in the United States to form an llc, receive official documents from the state, and ensure that the company remains healthy are called Registered Agents.
When you decide to form an LLC in Usa, Northwest is one of the best options. Northwest provides a free mailing address for your company.
There are also different agencies, you can access the full list and detailed review page of other Registered Agent companies that establish LLCs from this link .
How to Form an LLC in Delaware?
You can form a remote LLC online in the state of Delaware. You do not need to visit the state of Delaware in person to form an LLC. Additionally, non-US citizens are not required to have an ID or passport for company formment. You need a registered agent for the installation. This agency will prepare the documents required for the installation for you and submit them online to the state. If you deal with Northwest agency, you do not have to pay extra for the company address because this agency has postal address offices in all US states (including Delaware) and allows you to use this address. Other details are below.
- Determine Your Company's Name: You'll need a name for your LLC that is original and prominent, but not used by any other business or company in the state. Make sure there are no conflicts with company names already in the state database. the company name you plan to use on the state website . Choosing a Name for an LLC Company for name rules .
- You can get a domain name for your company: Check if the website domain name you will create for the business name you choose has been registered before. With Namecheap you can quickly register an llc domain name so that no one else can get and use your domain name in the future.
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- Apply Online: Determine a Registered Agent to establish your company and keep it active. Northwest is among the most affordable and highest quality options. here and order your company to be established online by selecting Delaware from the state selection section. Northwest will carry out all transactions for you according to the order form in your application.
- Operating Agreement: The operating agreement, called the Operating Agreement, determines the management style and rules of the company. Northwest will prepare an operating agreement for you free of charge after company establishment and deliver it to you electronically. You do not need to mail or electronically send this agreement to the state, just keep the agreement you prepared and signed.
The approval period for the LLC company is 5-7 business days for the state of Delaware.
What happens after your LLC company is approved in the state of Delaware?
- After the company is formed in Delaware, your LLC certificate of formation is delivered to you digitally by your agent, and you can also download this document by searching for your company name on the state website.
- Once you receive the incorporation documents (digitally), obtain a Federal Identification Number (EIN) from the IRS. Without EIN, you cannot open a bank account or register for payment systems such as virtual POS (stripe) or paypal. You can also apply for an EIN yourself by filling out form SS4 and faxing it to the IRS. the guide here . The other option for EIN is to get a paid service. You can get EIN application service from us for $ 29. We can process it on the same day and carry out the entire process for you. this order form after company setup .
State Requirements and Taxes
Federal Taxes: All LLCs require a federal tax identification number, EIN. An EIN is basically the business version of a social security number and is used for important LLC functions. If you obtain your LLC company income from American citizens, you may be required to pay federal income tax to the state after a certain turnover. Income from single-member LLCs is taxed through the company owner unless otherwise declared. The situation does not change in the state of Delaware.
State Requirements: In Delaware, LLCs must file a report with the state with their Annual Franchise Tax whether they have income or not. This franchise tax must be paid annually. Franchise tax in Delaware is standard $300.
Delaware also has a progressive income tax, with income tax ranging from 2.2% to 5.55% on incomes up to $60,000. Income above 60,000 USD is taxed at 6.60%. If you earn income from people residing within the state or if you purchase real estate in this state, this means that you may be exposed to income tax.
Sales Tax Rate in Delaware
Sales Tax in Delaware: If your LLC will sell goods to people in the state of Delaware, you do not need to collect and pay sales tax because there is no Sales Tax in this state, meaning the Delaware Sales Tax rate is “0”.
Delaware Sales Tax Rate: 0% (No sales tax)
Obtaining Business Licenses and Permits
If you own a business such as a brick-and-mortar shop or store in any city within the state and run a physical retail business or other type of business there, you may need some licenses and permits depending on what you do, for which you need to review the documents and instructions on the state website.
excise taxes on the sale of certain products, including alcohol, cigarettes and tobacco, and gasoline . These consumption taxes are reflected on the consumer through the price of the goods.
Annual Reporting
Unlike other states, Delaware LLCs do not file an Annual Report with the state, but are required to pay a flat-rate Annual Franchise Tax of $300 each year.
The $300 tax must be paid by every LLC formed in Delaware, regardless of income or business activity. This is a requirement to keep your LLC in compliance with the state.
How to Pay Delaware Annual Franchise Tax?
It can only be paid online and cannot be filed by mail. You can pay with your credit card or current account. at this link by entering your company's registration number on the state website .
Fee
300$
Due Date
Delaware Annual Franchise Tax is due by June 1 of each year. You must make the first payment by June 1 of the year after you form the LLC. However, it is necessary to repeat the payment at the same rate every year.
For example, if you formed a Delaware LLC on March 15, 2022, you must pay the $300 Franchise Tax by June 1, 2023.
What Happens If Delaware Annual Franchise Tax Is Not Paid? Is there any penalty?
If you do not pay your Annual Franchise Tax by June 1, you will pay a $200 late fee. An additional 1.5% late payment interest will be applied to your company for each month unpaid.
For more information about taxes, you can check out the article Taxation in America
