Forming a single-member LLC (Limited Liability Company) in Delaware involves several steps. Here’s a general guide to help you through the process:
1. Choose a Name for Your LLC
- Requirements: The name must include “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.”
- Uniqueness: The name must be unique and not similar to existing businesses registered in Delaware. You can check name availability on the Delaware Division of Corporations website.
2. Designate a Registered Agent
- Registered Agent: This is an individual or business entity that will receive legal documents on behalf of your LLC. The agent must have a physical address in Delaware.
- You can be your own registered agent or hire a registered agent service.
3. File the Certificate of Formation
- Form: You need to file the Certificate of Formation with the Delaware Secretary of State.
- Information Required: The form requires basic information, including the name of your LLC and the registered agent’s name and address.
- Filing Fee: There is a filing fee (typically around $90) that needs to be paid during this process.
- You can file online, by mail, or in person.
4. Create an LLC Operating Agreement
- Not Mandatory: While Delaware doesn't require an Operating Agreement, it is highly recommended to outline the management structure and operating procedures of your LLC.
- Contents: It generally includes details on how profits and losses will be distributed, management responsibilities, and procedures for adding new members or dissolving the LLC.
5. Obtain an EIN (Employer Identification Number)
- IRS Requirement: If your LLC has more than one member or if you plan to hire employees, you must obtain an EIN from the IRS. This can be done online at the IRS website at no cost.
- Optional for Single-Member: If you are a single-member LLC without employees, you don’t necessarily need an EIN, but it’s useful for opening a bank account and managing taxes.
6. Comply with State and Local Requirements
- Business Licenses: Check to see if your business requires any additional local or state licenses or permits to operate legally.
- Annual Franchise Tax: Delaware requires LLCs to pay an annual franchise tax and file an Annual Report.
7. Open a Business Bank Account
- Separation of Finances: It’s important to keep your business and personal finances separate. Open a dedicated business bank account for your LLC.
Additional Considerations
- Compliance: Stay compliant with Delaware’s regulations and annual filing requirements to maintain your LLC’s good standing.
- Consult an Attorney or Accountant: If you have specific questions or unique circumstances, consider consulting with a legal or financial professional.
Following these steps will help you successfully form a single-member LLC in Delaware. Make sure to keep all documents and records organized for future reference.