How to Set Up an LLC in Delaware

By Larissa Bodniowycz, J.D.

How to Set Up an LLC in Delaware

By Larissa Bodniowycz, J.D.

A limited liability company (LLC) is a popular type of business entity because it offers structural flexibility, the liability protections of a corporation, and the tax benefits of a partnership. Compared to some of the other professional structures, it offers additional benefits that can help you succeed and meet your short-term and long-term goals.

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If you have decided that you want to register and set up your LLC in Delaware, follow these steps.

1. Choose a business name.

Your name must contain either the words "limited liability company" or the abbreviations "L.L.C." or "LLC" and must be different from any other entity registered in Delaware. You can check name availability with the Delaware Secretary of State prior to registering, but even if a name is available, it must still comply with Delaware's naming requirements.

You also may want to see if your business name is available as a web domain and consult with a trademark attorney to ensure your name is not being used by another business. Once you have your name, you can reserve it by filing an Application for Reservation Of Limited Liability Company Name with the Delaware Secretary of State or by immediately filing a Certificate of Formation of a Limited Liability Company.

2. Select a registered office and a registered agent.

Delaware LLCs must maintain a registered office in Delaware, so you need to determine your registered office address. It does not have to be the same as your place of business in Delaware. You also need to designate a registered agent. It can be the business itself, a natural person residing in Delaware, or another Delaware entity. The registered agent agrees to accept service of process of a legal action on behalf of the business.

3. Prepare and file the Certificate of Formation.

An authorized person, called an organizer, must prepare and file your business's Certificate of Formation of a Limited Liability Company, referenced above. This person can be an attorney, an LLC owner (called a member), or someone else. It requires only minimal information and must include the company name, the address of its registered office, and the name and address of the registered agent.

You can include more information if you desire, but keep in mind that this document is publicly filed. To maintain confidentiality of business operations, members often put additional provisions in the agreement, which is not publicly filed, rather than the Certificate of Formation. Your LLC's organizer must file it with the Delaware Secretary of State along with a filing fee and a cover letter with the authorized person's name and contact information. You can request expedited filing for an additional fee.

The Secretary of State issues a stamped filed copy of it. Processing typically takes three to four weeks for regular filings. Your LLC is generally formed once the Secretary of State approves and files the Certificate of Formation. However, you can designate a later formation date if you choose.

4. Draft an LLC agreement.

Delaware LLC's must have an operating agreement. This document defines company ownership and operating procedures. It is kept with company records, not filed publicly. It can involve complicated provisions involving the rights and interests of the members, LLC management, capital contributions, allocations of profits and losses, transfers of membership interest, and the potential dissolution.

Be sure to understand the rules and regulations that the state of Delaware has for business formation. Before beginning the process, you should visit the state's website to find out what applicable fees and other requirements must be satisfied. That way, there won't be any surprises once it comes time to set up your Delaware LLC.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.