A limited liability company, or LLC, merges the tax advantages of a partnership with the limited liability of a traditional corporation. In the state of Delaware, the rules governing the formation and organization of LLCs are set out in the Limited Liability Act, contained in Chapter 18 of Title 6 of the Delaware Code. The Division of Corporations is responsible for administering these rules.
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The name of any LLC registered in Delaware must include the terms, “Limited Liability Company,” “LLC,” or “L.L.C.” The name must be capable of being distinguished from any other business entity registered in Delaware. The Division of Corporations encourages organizers to check the validity of any proposed name in advance, to avoid any difficulties. A chosen name may be reserved for a period of up to 120 days and this period can be extended by request.
The Delaware rules provide that each LLC must appoint a registered agent to act on its behalf, although the company may act as its own agent, if it is physically located in the state. Either an individual or a corporate entity may be appointed as a registered agent. The Division of Corporations holds a list of registered agents available to act for companies. An LLC is permitted to change its registered agent at any time by filing the relevant documentation with the Division of Corporations.
Articles of Organization
Filing articles of organization with the Division of Corporations is an essential stage in forming an LLC. Certain information must be included in the articles of organization including the name of the company and the address of its registered office. The articles may also set out the duration of the company, unless the organizers intend it to exist in perpetuity.
Once it has been formally organized, an LLC registered in Delaware has a number of continuing obligations imposed by the state regulations. It must, for example, ensure that records are available for inspection by officials from the Delaware Division of Corporations. For this purpose, financial information, tax returns and details of members must be maintained at the LLC’s registered office. In addition, any other company agreements and details of property contributed by each member should be available at the registered office.
Under Delaware LLC rules, an LLC can be dissolved by law on the occurrence of a number of events including the expiry of the time specified in the articles of organization. It may also be dissolved at any time by the consent of all members.
References & Resources
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