Delaware Limited Liability Company Act 18-404
Delaware's Limited Liability Company Act is the law that governs companies of one or more members. A limited liability company in Delaware can be a small business run from one's house or a major corporation. All the state requires is that the company has a registered agent acting on its behalf in Delaware. The registered agent must be based in Delaware or have a business license in Delaware, although the company itself does not have to meet either requirement.
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Certificate of Formation
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Becoming a limited liability company requires a certificate of formation. The certificate must be filed at the Secretary of State's office and must contain the company name and the address of the registered office. The certificate can be amended by the company at any time.
Benefits
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The biggest benefit to forming a company in Delaware is the low taxes (the franchise tax is only $250 for an LLC). Delaware also has no sales tax, and no income tax is charged to businesses that don't do business in Delaware. Corporate records don't have to be kept in Delaware, and one person can act as the corporate officer.
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Registered Agents
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Every registered agent must maintain an office in the state of Delaware. If the agent is based out of state, he must be licensed to conduct business in Delaware. The agent is also responsible for notifying the state of payment of taxes. An agent serving more than 50 entities must maintain an office in Delaware and maintain a Delaware business license.
Serial LLCs
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A key feature of Delaware's limited liability law is that it allows what are known as serial LLCs. The serial LLC allows a business owner with several different kinds of businesses to treat each one separately from a liability standpoint. The company can insulate the liability of each business.
Legal Aspects
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All business cases in Delaware are heard by the Court of Chancery, located in all three Delaware counties. This court handles the internal disputes of companies or business partners.
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