There are several steps to incorporating a Delaware LLC online. Many entrepreneurs choose to incorporate companies in Delaware due to the low startup costs and franchise tax, as well as the flexibility of their entity itself. In fact, Delaware offers more operating agreement flexibility than any other state. Additionally, members are protected against liabilities and creditors, since Delaware has limitations on personal liability. LLC members cannot be held responsible for sums higher than their initial investment in the company. If necessary, LLC loans can help finance your business. As a business owner, incorporate in Delaware to maximize operating agreement flexibility, and reduce startup costs. Read on to discover a step-by-step guide on how to incorporate a Delaware LLC online.
Determine Business Type
First, you need to determine the type of business your company will operate as. Since the Delaware Division of Corporations doesn’t give legal advice, consult an attorney or CPA to help determine the best business type for your needs. As an LLC, you are required to file with the Division of Corporations. There are several online resources where you can see overviews of applicable business types and their respective registration processes. Surely, determining the type of business for your Delaware LLC provides direction and considerations for the rest of the process.
Determine Business Name
Next, you’ll need to name your business. As an LLC, you’re required to include the words “Limited Liability Company,” or any abbreviations thereof, in your business’s name. Your name also can’t be too similar to any existing entities registered with the Secretary of State. There’s an online database where you can check the availability of business names. Additionally, you can reserve available names for 120 days at a $75 fee, which can also be done online. Consider doing business under a trade name that differs from your actual company’s name. Doing so requires registration with the county your LLC is located in, also for a $25 fee. Absolutely, determining a business name significantly impacts your profits and image to consumers.
Designate A Registered Agent
Third, you need to designate a registered agent that represents your LLC. This is required by law. The agent’s responsibilities include the reception of tax forms, legal documents, lawsuit notices, and official government correspondence on behalf of your business. They must be either a resident of Delaware, or a corporation. If they’re a corporation, they must be authorized to transact in Delaware. If you’re a resident, you can nominate yourself. Certainly, designating a registered agent provides your business a point of contact with the state’s government.
Certificate Of Formation
Then, file a Certificate of Formation with the Division of Corporations. This document is what officially forms your LLC. It must include your business’s name, your registered agent’s name and address as well as the duration of your LLC (often perpetual). Additionally, you need to include the date of formation as well as your name and signature. Once completed, file the certificate online at the Delaware Division of Corporations website. Definitely, filing the Certificate of Formation officially forms your LLC to be in Delaware good standing.
Sign Operating Agreement
Lastly, draft an operating agreement that determines ownership and management structure as well as processes. While Delaware requires LLCs to have operating agreements, they aren’t required to be provided to the state, or be in writing. However, having a written, signed agreement is recommended to increase protection and credibility when dealing with other businesses. Often, these agreements include provisions for liability, ownership, dissolution, and transfers of interest. Of course, signing an operating agreement establishes a structure and set of processes for your LLC to follow.
Incorporating a Delaware LLC online can be done in a myriad of ways. One way involves determining a business type as the first step, to give the rest of the process direction. Second, determine a name for your business to maximize consumer interest. Third, designate a registered agent to establish contact between state government and your business. Next, file the Certificate of Formation to officially establish your company in the eyes of the state. Finally, sign an operating agreement to establish management structures and processes. When searching for methods to incorporate Delaware LLCs online, consider the method described above.