What Is an LLC in Delaware?
A limited liability company is a business entity formed under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.) that provides its owners — called members — with limited liability protection while offering flexible management and pass-through federal tax treatment. Members are generally not personally liable for the LLC’s debts and obligations; their financial exposure is limited to the amount of their investment in the company.
Delaware’s LLC Act is recognized as one of the most permissive in the United States. Management may be vested in the members directly or delegated to one or more managers chosen in the manner provided in the limited liability company agreement, Delaware’s term for what most states call an operating agreement. Under 6 Del. C. § 18-402, management defaults to the members in proportion to their profit interests unless the limited liability company agreement provides otherwise. For federal income tax purposes, a single-member LLC is taxed as a disregarded entity and a multi-member LLC is taxed as a partnership by default; either structure may elect corporate tax treatment by filing IRS Form 8832.
Delaware does not impose a state-level sales tax, and it has no entity-level income tax on LLCs that retain pass-through classification. However, every domestic LLC must pay a flat $400 annual tax to the state, due by June 1 each year, and any LLC doing business in Delaware must obtain a business license and pay Delaware’s gross receipts tax on revenue earned within the state.
Delaware LLC Name Search
The LLC’s name must be distinguishable on the records of the Delaware Secretary of State from the name of every other corporation, partnership, limited partnership, statutory trust, limited liability company, or registered series on file. Under 6 Del. C. § 18-102, the name must contain the words “Limited Liability Company” or the abbreviation “L.L.C.” or the designation “LLC.” The statute permits the name to include words such as “Company,” “Association,” “Club,” “Foundation,” “Fund,” “Institute,” “Society,” “Union,” “Syndicate,” “Limited,” “Public Benefit,” or “Trust.” The word “bank,” or any variation thereof, may not appear in the name unless the LLC falls within a narrow banking-related exception defined in the statute.
An organizer may check whether a proposed name is available using the Delaware Division of Corporations Entity Search tool, which returns both active and inactive entities. Passing the online search does not guarantee that the Division of Corporations will accept the name when the certificate of formation is reviewed—final determination occurs at the time of filing.
Name Reservation: An organizer who wishes to secure a name before filing may reserve it for a period of 120 days by filing a reservation application with the Secretary of State and paying a $75 fee, as established in 6 Del. C. § 18-1105(a)(1). The reservation may be renewed for successive 120-day periods, each requiring an additional $75 fee. Name reservations may be submitted online or filed in writing. The right to the exclusive use of a reserved name may be transferred to another person by filing a notice of transfer with the Secretary of State and paying the same $75 fee.
Choosing an LLC Registered Agent in Delaware
Every LLC formed in Delaware must designate and continuously maintain a registered agent and a registered office in the state. The registered agent receives service of process, legal notices, and official government correspondence, including the annual tax statement, on behalf of the LLC. The registered office is the physical street address in Delaware where the agent is available during normal business hours.
Under 6 Del. C. § 18-104, the registered agent may be any of the following: the LLC itself, an individual resident of Delaware, a domestic business entity (corporation, LLC, partnership, or statutory trust), or a foreign entity authorized to transact business in Delaware. A registered agent may not perform its duties solely through a virtual office or a mail-forwarding service. If the LLC is physically located in Delaware, it may serve as its own registered agent; otherwise, most organizers designate a commercial registered agent with a Delaware office. A list of Delaware registered agents is published by the Division of Corporations.
The registered office address must include the street, number, city, and postal code — a P.O. Box alone is not sufficient. Any registered agent serving more than 50 entities (a “commercial registered agent”) must satisfy additional qualifications under the statute, including maintaining a Delaware business license and having a natural person generally present at the office during normal business hours. Failure to maintain a registered agent can result in cancellation of the LLC’s certificate of formation if a successor agent is not appointed within 30 days after the agent’s resignation becomes effective.
Note: Delaware law requires the LLC to provide its registered agent with the name, business address, and business telephone number of a natural person authorized to receive communications on behalf of the LLC. The registered agent may resign if the LLC fails to provide this information.
LLC Filing Requirements in Delaware
An LLC is formed in Delaware by filing a certificate of formation with the Delaware Division of Corporations. Under 6 Del. C. § 18-201, one or more authorized persons must execute the certificate. Delaware’s formation requirements are deliberately minimal compared to those of many states. The certificate of formation must set forth:
- The name of the limited liability company (including a required LLC designator)
- The address of the registered office and the name and address of the registered agent for service of process
- Any other matters that the members determine to include
The certificate of formation does not require the disclosure of members’ or managers’ names, the LLC’s purpose, or its management structure—those details are governed by the limited liability company agreement, which is not filed with the state. Sample forms with instructions are available on the Division of Corporations LLC forms page, and a fillable cover memo should be submitted alongside the certificate.
The state filing fee for the certificate of formation is $110, which includes the statutory $70 filing fee under 6 Del. C. § 18-1105(a)(3) plus a $40 municipality fee collected under 6 Del. C. § 18-206(e). Filing may be accomplished through the following methods:
Online: Submit the completed certificate through the eCorp Business Services portal by selecting “Document Filing and Certificate Request.” This service is available Monday through Thursday from 7:45 a.m. to 11:59 p.m. Eastern Time and Friday from 7:45 a.m. to 10:30 p.m. Eastern Time. The fees are not charged upon submission; they are applied when the order is processed, and an invoice accompanies the completed request.
By Mail: Send the completed certificate of formation, cover memo, and payment to Division of Corporations, John G. Townsend Building, 401 Federal Street, Suite 4, Dover, DE 19901. All requests are returned via regular First Class mail unless a Federal Express or UPS account number is provided.
Expedited processing is available at additional cost: same-day service is $200, 24-hour service is $100, 2-hour priority service is $500, and 1-hour priority service is $1,000, as set forth in the Division of Corporations fee schedule. The LLC’s existence begins at the time of filing of the initial certificate of formation with the Secretary of State, or at any later date or time specified in the certificate (not more than 180 days after the filing date). Delaware does not impose a publication requirement or an initial report filing at the time of formation.
How Much Does it Cost to Create an LLC in Delaware?
| Cost | Mandatory or Optional | Amount | When It Applies | Official Source |
| Certificate of formation filing fee | Mandatory | $110 | At formation | Division of Corporations fee schedule |
| Name reservation | Optional | $75 | Before formation, if reserving a name | 6 Del. C. § 18-1105(a)(1) |
| Annual LLC tax | Mandatory | $400 | Due June 1 each year after formation | 6 Del. C. § 18-1107(b) |
| Late payment penalty (annual tax) | Conditional | $200 | If the $400 tax is not paid by June 1 | 6 Del. C. § 18-1107(e) |
| Same-day expedited processing | Optional | $200 | If requested at filing | Division of Corporations fee schedule |
| 24-hour expedited processing | Optional | $100 | If requested at filing | Division of Corporations fee schedule |
| 2-hour priority processing | Optional | $500 | If requested at filing | Division of Corporations fee schedule |
| 1-hour priority processing | Optional | $1,000 | If requested at filing | Division of Corporations fee schedule |
| Certificate of Good Standing (Short Form) | Optional | $50 | When proof of good standing is needed | Division of Corporations fee schedule |
| Certificate of Good Standing (Long Form) | Optional | $175 | When a full filing history is needed | Division of Corporations fee schedule |
| Certified copy of a filed document | Optional | $50 plus $2 per page | When a certified copy is requested | Division of Corporations fee schedule |
| Registered agent (commercial) | Varies | Varies by provider | Ongoing annual cost | — |
| Delaware business license | Mandatory if doing business in Delaware | Varies by activity | Upon commencement of business in Delaware | Delaware Division of Revenue |
LLC Operating Agreement in Delaware
Delaware’s LLC Act does not merely permit an operating agreement—it treats the limited liability company agreement as the foundational governing document of the LLC. Defined in 6 Del. C. § 18-101(9), the agreement may be “written, oral, or implied” and governs the affairs of the LLC and the conduct of its business. A limited liability company agreement of a single-member LLC is explicitly enforceable under the statute, even though only one person is a party to it. The agreement is not filed with the state; it is retained internally by the LLC and its members.
Delaware’s LLC Act is built on the principle of maximum contractual freedom. Under 6 Del. C. § 18-1101(b), “it is the policy of this chapter to give the maximum effect to the principle of freedom of contract and to the enforceability of limited liability company agreements.” This means that members may use the agreement to expand, restrict, or even eliminate fiduciary duties that members or managers owe to one another and to the LLC, subject only to the implied contractual covenant of good faith and fair dealing, which cannot be eliminated.
In the absence of a limited liability company agreement, the Act’s statutory defaults control. Management is vested in the members in proportion to their percentage interest in profits, with decisions controlled by a majority profit interest. Distributions, profit and loss allocations, and transfer restrictions all fall under default provisions that may not align with the members’ actual intentions. The agreement should address management authority, profit and loss allocation, admission and withdrawal of members, capital contribution obligations, transfer restrictions on membership interests, and dissolution triggers. A single-member LLC should also maintain a written agreement to reinforce the legal separation between the member’s personal assets and the LLC’s assets, which is critical to preserving limited liability protection.
How to Get an EIN for an LLC in Delaware
A federal Employer Identification Number (EIN) is a nine-digit number issued by the Internal Revenue Service that identifies the LLC for federal tax purposes. An EIN is required for any LLC that has employees, files certain federal tax returns (such as excise tax returns or employment tax returns), or withholds taxes on income paid to a nonresident alien. A single-member LLC with no employees is not legally required to obtain an EIN unless it elects non-default tax classification, but most banks require one to open a business account, and obtaining one is generally recommended.
The fastest method is the IRS online EIN application, which issues the EIN immediately upon completion. The applicant must have a valid Taxpayer Identification Number (SSN or ITIN), and the LLC must be formed in the United States. The online tool is available Monday through Friday from 6:00 a.m. to 1:00 a.m. Eastern Time, Saturday from 6:00 a.m. to 9:00 p.m., and Sunday from 6:00 p.m. to midnight. The IRS limits applicants to one EIN per responsible party per day.
Applicants who cannot use the online tool may complete IRS Form SS-4 and submit it by fax (approximately 4 business days for processing) or by mail (approximately 4 to 5 weeks). The application requires the name and Taxpayer Identification Number of the LLC’s responsible party, the individual who controls, manages, or directs the LLC, and the disposition of its funds and assets. There is no fee to apply for an EIN.
Note: The IRS advises that an entity should be formed through the Secretary of State before applying for an EIN. File the certificate of formation with the Delaware Division of Corporations first, then apply for the EIN.
Registering for State Taxes in Delaware
Delaware does not impose a state sales tax, which distinguishes it from most other states. However, an LLC doing business in Delaware faces three primary state-level tax obligations: the annual LLC tax, the gross receipts tax, and the personal income tax withholding requirement for employers.
Every domestic LLC must pay a flat $400 annual tax under 6 Del. C. § 18-1107(b), due on June 1 following the close of each calendar year. This tax is not based on revenue, profit, or the number of members—it is a fixed charge for the privilege of maintaining an LLC under Delaware law. Failure to pay triggers a $200 penalty plus interest at 1% per month. If the tax remains unpaid for three consecutive years, the certificate of formation is automatically canceled.
Any LLC conducting a trade or business within Delaware must obtain a Delaware business license from the Division of Revenue and pay the state’s gross receipts tax on revenue earned in Delaware. Gross receipts tax rates range from 0.0945% to 1.9914%, depending on the business activity, with monthly exclusions generally starting at $100,000. Registration is accomplished through Delaware’s One Stop Business Registration and Licensing System, which simultaneously registers the LLC with the Division of Revenue, the Division of Unemployment Insurance, and the Office of Workers’ Compensation.
| Tax Type | Agency | Registration Method | Fee |
| Annual LLC tax ($400) | Division of Corporations | Pay via LLC/Partnership Tax portal | $400/year |
| Gross receipts tax | Division of Revenue | One Stop | None to register |
| Business license | Division of Revenue | One Stop | Varies by activity |
| Withholding tax (if employees) | Division of Revenue | One Stop (Part B of CRA form) | None to register |
Registering as an Employer in Delaware
An LLC that hires employees in Delaware must register with state agencies for unemployment insurance, income tax withholding, and workers’ compensation coverage. The most efficient path is through the One Stop Business Registration and Licensing System, which allows simultaneous registration with the Division of Revenue, the Division of Unemployment Insurance, and the Office of Workers’ Compensation.
- Unemployment Insurance: The Delaware Department of Labor, Division of Unemployment Insurance, administers the state’s unemployment insurance program. Employers may register by filing a Form UC-1 (Report to Determine Liability) through One Stop or directly with the Division. New employers are assigned a tax rate equal to the average of all employer rates statewide for the preceding five years. The Division can be reached at (302) 761-8484 for questions regarding employer contribution rates.
- Income Tax Withholding: Delaware imposes a personal income tax, and employers must register as withholding agents, withhold state income tax from employee wages, and remit the withheld amounts to the Division of Revenue. Registration is completed through One Stop by completing Part B of the Combined Registration Application. The Division of Revenue provides a Withholding Guide with current tables, due dates, and filing instructions.
- Workers’ Compensation: Delaware law requires employers with one or more employees to carry workers’ compensation insurance. Coverage may be obtained through private insurance carriers. The Office of Workers’ Compensation within the Division of Industrial Affairs oversees compliance and maintains an employer look-up tool for verifying current coverage.
- New Hire Reporting: Federal and state law require employers to report all newly hired and rehired employees within 20 days of the hire date. Reports are submitted to the Delaware State Directory of New Hires online or by mail to Delaware State Directory of New Hires, PO Box 19, Ridgeland, MS 39158.
| Obligation | Agency | Registration Method |
| Unemployment insurance | Division of Unemployment Insurance | One Stop or Form UC-1 |
| Income tax withholding | Division of Revenue | One Stop (CRA Part B) |
| Workers’ compensation | Office of Workers’ Compensation | Private carrier; verify via employer look-up |
| New hire reporting | Delaware State Directory of New Hires | Online portal or mail |
| Federal payroll obligations (Form 941, FUTA, Form I-9) | IRS / USCIS | IRS.gov |