How Much Does an LLC Cost In Delaware? Fees & Taxes in DE
Delaware has been a “holy land” for entrepreneurs for decades, especially for those who dream big and plan business scale-up in the short run. If you already know how to start an LLC in Delaware and want to look into the related math, you’ve come to the right place.
In this article, you’ll find a detailed breakdown of Delaware LLC fees and any associated costs you’ll have to pay to set your entity up and keep it running.
How Much is an LLC in Delaware?
The first thing you should understand is that registering an LLC is a process that entails some costs. It’s not free of charge as with a partnership or a sole proprietorship. Since limited liability companies are regulated by state laws, LLC costs are state-specific too.
If you wonder which is the cheapest way to start an LLC in Delaware, it will largely depend if you engage an assistant or handle the process on your own. Hiring someone to help will obviously bump up your formation grand total.
Should you need any help one way or another, consider hiring an LLC service that won’t add to your expenses too much and do the job professionally.
Speaking of the costs themselves, by and large, they fall into:
- Compulsory charges: These are state fees you can’t avoid. Though there are only a few of them for LLCs, they must be observed;
- Optional payments: These are charges that occur depending on the situation or business scenario you have and on additional services you might need.
Most Common LLC Fees in Delaware
Each state has a list of obligatory and regular fees stipulated for companies. While the types of fees are very similar across the states, the charges payable are different.
To calculate the cost of forming an LLC in Delaware, you should consider which of those fees are appropriate for your entity. The same is true for upcoming maintenance expenses you’ll have to cover on a regular basis.
Delaware LLC Filing Fee: $90
As in other US states, creating a company here is about registering a Certificate of Formation or an LLC statute with state authorities. In Delaware, you should address the documents to the Department of State.
The state allows for the following filing methods:
- You can complete a form on the Division of Corporations website, print it out, and send it to the state officer by fax or via mail;
- You can file online via the Document upload service to submit your Certificate of Formation electronically.
Whatever the filing method, an LLC filing fee in Delaware remains the same. It’s $90. Though the state office handles multiple filing applications daily, it won’t take more than 3 or 4 business days to process your documents.
Once your Delaware Certificate of Formation is approved, you’ll get its sealed copy from the Department of State along with an LLC identification number.
LLC Fee in Delaware: Registered Agent: $0 - $150
A registered agent is a law requirement across US states. Wherever you start a limited liability company, you’ll have to appoint a representative agent to register an entity.
Whether it will add to your LLC cost in Delaware or not depends on which of the available agent options you choose. The main rule for this position is the street address. So, any adult person or legal entity could fulfill the agent’s function. Hence:
- You can serve as your own RA if you reside in Delaware. This will cost you nothing and ensure the ultimate privacy;
- You can appoint a third party that will entangle certain payments for sure.
Notably, unlike other states, Delaware allows LLCs operating in the state to be their own registered agents as legal entities. This will also entitle you to save some funds on this role.
Meanwhile, by entrusting the job to a third party, get ready to pay from $50 to $150 annually. This is a subscription fee normally charged by professional registered agent services functioning in the state.
Delaware Franchise Tax: $300
Most US states require LLCs to file annual reports to maintain their compliance status and stay operable. Delaware is among the jurisdictions that have no annual filing requirements in place that will save you the need to observe formalities and filing terms.
That said, though, the state imposes a franchise tax on LLCs. It’s the payment you’ll have to make annually to run your company in the state. A franchise tax rate in Delaware is $300.
Note that the above rate is uniform for all Delaware LLCs, irrespective of how big your business is and whether you make a profit or not. Besides, failing to settle the tax payment before June 1, you’ll incur a $200 penalty along with a 1.5% interest per month of delay.
Foreign LLC Cost in Delaware: $200
To become a part of a Delaware business community, entities registered in any other state should obtain a foreign qualification in Delaware. This is needed to get a legitimate legal status and regulate state payments.
Being widely popular for starting a business, Delaware attracts not only domestic entrepreneurs but also businessmen from other states who seek to optimize taxes and get better legal protection for their entities.
A foreign LLC price in Delaware is $200. You should submit a Certificate of Foreign LLC Registration with the state department and the process is pretty much like domestic LLC formation.
Business License Costs in Delaware: $50 - $450
One of the statutory Delaware peculiarities most other states omit is a compulsory business license. In contrast to other jurisdictions, a general operating license is a law requirement for any enterprise registered or running in Delaware.
In the meantime, there is no single general business license fee, it will vary from $50 to $450 depending on the type of activity. The general license is issued by the Department of Revenue and you can file an online registration form to get it.
Above that, you’ll have to register for some other licenses at the municipal or county level. You can check with the local government agency to know for sure. Besides, there is a whole list of professions that require a special professional license in Delaware.
Delaware Taxes
LLCs taxed as disregarded entities in Delaware are free from paying a state income tax. This is one of the biggest LLC benefits that will enable you to save on regular payments. Your company’s income will be taxed under your and your partners’ (if any) personal tax rates.
Along with an annual franchise tax, though, your Delaware LLC will be exposed to other taxes such as:
- An 8.7% income tax incurred by LLCs that choose to be taxed as C-Corps;
- Members of LLCs using pass-through taxation are exposed to a 15.3% self-employment tax;
- Delaware payroll taxes for LLCs that use hired workforce vary from 0% to 6.6%, with the highest rate applied to employees that earn over $60,000;
- The good news is that Delaware is one of a few US states that have no sales tax, thus, promoting commercial activities.
Other Delaware LLC Costs
While taxes and formation costs are inescapable for all Delaware LLCs, there are a number of optional expenses peculiar to a business situation and your intentions. Those are mostly added one-time service rates.
Delaware Name Reservation Fee: $75
This service is in demand among future filers that have already invented a distinguishable and memorable name for their entity but are not ready to register it with the state yet. Normally, state departments allow putting the chosen name on hold.
The same is true for Delaware. You can reserve the desired LLC name for a period of 120 days by filing a Name Reservation Application and paying a $75 reservation fee.
DBA Name Registration in Delaware: $25
Similar to other US states, Delaware enables LLCs to use other names than their registered names for market operations. Notably, a single LLC can have many fictitious, assumed, or DBA (doing business as) names.
Multiple DBAs bring diverse trading, commercial, and marketing opportunities by giving an LLC a chance to build multiple brands without going into multiple legal structures.
A DBA name calls for state registration to be legally used. In Delaware, a DBA registration fee is $25 per county, i.e. to use the same name in another locality within the state, you’ll have to register it there as well.
Certificate of Good Standing in Delaware: $50
It’s a document verifying your company’s good standing with the state or so-called due compliance status, hence the name. It’s often required by financial, licensing, and other public institutions when they seek to confirm your LLCs legitimacy.
Issued by the Department of State, a Certificate of Good Standing in Delaware costs $50.
Certified Document Copies in Delaware: $50
Whether you sign a new supply contract or a sales agreement, your vendor or customer can ask for a certified copy of your formation documents.
The same is true in situations when you apply for a business loan with the bank or simply open a checking account for a business.
To get document copies verified by the Department of State, you should place an order and pay $50 per document plus $2 for each page.
Certificate of Amendment in Delaware: $200
Should you decide to
- Change a company name;
- Change a registered company’s address;
- Appoint a new registered agent;
- Make changes in the existing registered agent’s data.
You will have to file amendments to your LLC statute to enforce those changes and make them legal.
In Delaware, amendments are introduced via the Certificate of Amendment filed with the Department of State. The filing fee is $200.
Certificate of Revival in Delaware: $169
In case you fail to pay a franchise tax, maintain a registered agent for your Delaware LLC, timely settle some obligatory state fees, or file taxes, your LLC might be marked as ‘not in good standing” or even void.
To regain an active status for your business, you should submit a Certificate of Revival form to the Delaware Corporations Division and pay a $169 processing fee to get it approved by the state.
The same procedure is applied if you need to reactivate an LLC you have dissolved voluntarily. Just make sure all taxes and compulsory charges are paid.
Certificate of Cancellation: $200
Under an LLC Act of the state of Delaware, you should file a Certificate of Cancellation with the state department if you decide to terminate your business and dissolve an LLC.
The certificate will legally quit your company’s existence. The filing fee is $200.