There are a wide variety of ways in which you can opt to legally structure your business. For some business owners, the prospect of incorporation can be intriguing, as it gives your organization credibility and an efficient pathway for generating capital by way of issuing stock. For others, the more informal nature of a sole proprietorship or general partnership will suffice. For many, however, the Limited Liability Company (LLC) provides the right combination of incentives and ease of maintenance. LLCs are incredibly popular and fairly ubiquitous in the business world, and if you are thinking of starting a Delaware LLC, you are likely making a sound maneuver on behalf of your enterprise.
Known as the First State, Delaware may seem like a small, unassuming spot on the east coast. It is, however, a major hub of commercial activity with global importance. In fact, the majority of Fortune 500 companies are incorporated in the state of Delaware, and the reasons for this are mainly two-fold. For one, Delaware is a state with favorable corporate tax rates and business-friendly laws. For two, it is a state that employs what is called the Chancery Court, which is one of the oldest legal systems in the country. The Chancery Court uses judges who are well-versed in business law to make judgments as opposed to juries, and many business owners find this to be a hospitable legal climate for their endeavors.
Starting a Delaware LLC: Choosing a Name
To get started on creating your Delaware LLC, you will need to choose a unique name for your business. In other words, the name you select must be distinguishable from the other registered LLCs on file with the state. Your name will also need to include the words “Limited Liability Company” or a suitable abbreviation thereof. You can reserve a name for a period of up to 120 days.
Next, you will need to appoint a registered agent for your organization. The role of this person–sometimes in-house counsel–is to accept all legal, government, and tax correspondence on behalf of your business. Your registered agent must have a valid physical address in the state of Delaware.
Completing a Certificate of Formation
To officially create your LLC, you will need to file a Certificate of Formation of Limited Liability Company. This document must be submitted to the Delaware Division of Corporations for processing. In this form, you will need to include: the name of your LLC, the name and address for your registered agent, and the signature of the authorized filer. This is largely the extent of the paperwork you will need to complete in this area, as Delaware does not have an annual reporting requirement.
Submitting Your Documents Online the Easy Way
While you do have the option to submit your Certificate of Formation by mail or fax, do you really have the bandwidth to print and fill out a stack of documents by hand? Why not work with us instead? At Corporation Center, we have an easy-to-complete web template to create your Delaware LLC online. To learn more, visit our FAQ page today.