Many years ago, Delaware was the first state to ratify the US Constitution and join the Union, which gained them to be known as “The First State”. Being one of the smallest states in the country, only second to Rhode Island, Delaware’s economy relies on chemical manufacturing and is referred to as the Chemical Capital of the World. The largest economic drivers in the state, however, are finance and insurance. Top companies with pro-business models coexist in the state, due to the low tax incentives and favorable laws for corporations. Without further ado, let us now show you what you need to do when forming an LLC in Delaware.
Why LLCs Might Be The Right Choice for Your Business
Not everyone is designed to be a business owner. The stress and demands can become overwhelming. The prize of all of this effort can be a profitable company that has you as the boss and lets you provide your livelihood. If this sounds like you, this article about forming an LLC in Delaware is definitely worth a read. Forming a Limited Liability Company (LLC) will give your business a legal structure to protect the long-term interests of the company.
The reasons for LLCs being popular structures for business owners are two: On one hand, in the case of lawsuits, or bankruptcy, the member’s homes, retirement accounts, or personal assets are protected. On the other hand, the profits flow through to the members of the LLC before being taxed, so they are taxed only once, as opposed to corporations. On top of that, Limited Liability Companies have more freedom than S or C corporations. This is because their owners can choose to manage them on their own or hire others for this task. Although there are some reports LLCs need to submit, the paperwork this type of structure requires is almost none.
Why Is Delaware Chosen to Form so Many Companies?
At this point, you might have understood why a Limited Liability Company might be convenient for your business but doesn’t yet explain the reason behind people choosing Delaware for forming LLCs. The first state is internationally recognized as a corporate paradise, and it is home to famous firms like Amazon, Tesla, and Disney, to name a few of them.
What makes Delaware the business mecca it is today are the lenient tax policies, reduced restrictions, and simplified corporate laws. In fact, corporations registered in Delaware that don’t take part in business operations across the state do not pay corporate income taxes. On top of that, there are no sales, personal property or even inheritance taxes. Even though you do have to pay a franchise to register your business in Delaware, it will seem like pennies when compared to the income tax you need to pay in other states. Companies across the nation that conducts business in Delaware usually establish shell companies that do not directly run business operations, to be able to avoid the taxes.
Forming an LLC has Never Been Easier
Before being able to process the forming of your LLC in Delaware, there are some matters you will need to handle. Selecting a unique business name, and appointing a registered agent with a valid Delaware address are just a few of them. With that in hand, you will be able to file your Certificate of Formation of Limited Liability Company and submit it to the Delaware division of corporations.
That is precisely what we do at the Corporation Center. With our help, we can take care of your company in just a few steps. Our online forms allow you to launch your Delaware LLC quickly. If you would like to know more about us, contact our representatives with any of the means of communication from our site.