How to Form a Limited Liability Company in Delaware

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By eHow Contributing Writer

Article Rating: (4 Ratings)

A limited liability company (LLC) is a business entity that provides business owners relief from personal liability of debt, just like a corporation. For tax purposes, however, the LLC can be treated as one of a variety of models, from a sole proprietorship to a partnership to a corporation, depending primarily on the number of members in the company. Delaware's tax and privacy protection for LLCs is vast, and the state is home to many businesses that do not operate in Delaware.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

Computer with Internet access
Legal assistance
Phone access

Step 1

Conduct a search to determine if your desired name is already taken. Some private LLC-forming companies include this search in their overall fee.
Step 2

Visit the state of Delaware's Web site and look under the Division of Corporations to download a state LLC form, called the certificate of formation (see Resources below).
Step 3

Complete the form, which essentially just requires your LLC's name and address.
Step 4

Follow the directions on the cover letter that comes with the certificate of formation form, including paying the initial $90 filing fee when you send in the form.
Step 5

Create an operating agreement. Though it's not required in Delaware, it is still highly recommended.

Tips & Warnings

Save time by consulting one of the many companies that will usher you through the process of forming an LLC in Delaware. Some enterprising groups have made it their business to do all the paperwork for companies looking to incorporate in Delaware, and many of these groups can form your LLC in as little as one week.
Though Delaware's tax laws are loose and LLCs offer a reprieve from liability, there are risks. Consult the Small Business Administration or your lawyer to learn the parameters of your LLC. For instance, it's essential that your personal affairs don't mingle with your business books even though you will file your business taxes with your personal income tax.
Not all "quickie" incorporation companies are reputable, so choose wisely or file as an LLC in Delaware yourself.

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