How to Form an LLC in Delaware

20 comments on “Delaware LLC”

1. Thank you for the comments regarding Delaware’s LLCs. I am starting a small independent solar brokerage firm in Massachusetts. I seek out principally rural properties suitable for large solar facility installations and link owners of these properties with solar developers. Your detailed commentary on Delaware requirements have steered be back to my home state with considerable savings in time and money.

   Thank You,

   Hank Young

   • Hank, sounds like an excellent business. And you’re certainly correct. Forming your LLC in Massachusetts – since that’s where you’re legally doing business – will certainly be the best bet.

     • Hello Matt,
       Where to form an LLC if you recently declared bankruptcy and want to start over with a business but don’t want people to find out who the owner of the business is?
       I guess what I mean is how to open an anonymous corporation or LLC?. I live in California but will be doing some business online and some locally in California.

       Thanks.

       • Hi Alex, this isn’t something that we cover, so we don’t have a specific answer for you. If you form an LLC outside of California, but are doing business in California you’ll likely need to file a Foreign LLC registration in California. I also recommend reading what is doing business in California. Having said that, if you hire a Registered Agent and hire a filing company to form your LLC, there are states where you can keep member’s info off of public records. Take a look at Wyoming, New Mexico, and Delaware. Hope that helps and best wishes.

2. Hi, Matt

   I came across your article and I’m really grateful that I did. That said, I have a question. I do not live within the US but I want to sell on amazon. I want to register my business within the US. As a non-US resident (im not allowed to sell on amazon from my homecountry), which state is best for me to form an LLC keeping in mind all the tax i’ll be entitled to pay?

   Is an LLC even advisable for me as a small business owner?

   As an amazon FBA seller I’m aware my goods may be stored in other states, which of these states will be best for me to register my business in?

   Thanks.

   • Hi Adepeju, thanks for the kind words. We’re unable to comment on the best state for tax purposes for foreigners. This can vary tremendously. We recommend speaking with an accountant that specializes in US taxes for foreigners. Apologies we could be more specific. Thank you for understanding.

3. I want to form a 2 member LLC that will invest in a private company (which is composed of 5 S-Corps). My silent partner who owns 20% of the LLC was told DE was the best because my partner wants to avoid corporate taxes. Note we are electing to be taxed as a pass-through and not a corporation. I live in NJ and the private company does business in NY and CA.

   • Hi Joseph, it comes down to where the LLC is legally doing business. The laws vary by state, so there could be a chance you your LLC will be doing business in NJ and the state in which your partner resides. It doesn’t matter where the private company does business. However, we haven’t fully dove into each state’s “doing business” statutes. I recommend speaking with an attorney to determine where you’ll be legally doing business. If it turns out you’re legally doing business in NJ and/or partner’s state of residence, forming the LLC in DE won’t matter for corporate taxes… since you’ll be taxed as a Partnership, there are no corporate taxes. The K-1 income will flow through to each of you and be paid in your respective states of residency. Furthermore, the DE LLC will need to be registered as a Foreign LLC in the state(s) where it’s doing business. Hope that helps.

4. I live in the UK, but I’ll be launching my first PL on Amazon US. What state would you recommend me to open an LLC? I want to make sure I’m not doing anything illegal in terms of taxes. I would really appreciate your help with this. Thank you!

   • Hi Marius, you’d need to speak with an accountant since taxes for non-US residents are different. This is not our area of expertise. Thanks for understanding.

5. Hi Matt, I was just curious I know some states if you start an LLC they have an expiration date. Do you know by chance which states in particular do not have expiration dates? Thank you for your time.

   Cody

   • Hi Cody, have never heard of this. Where did you read that? I believe you’re talking about a perpetual existence. In most states, LLCs by default have a perpetual existence. In some state filings, you can “override” that default and enter a “future date of dissolution”. Again though, there isn’t a state where LLC automatically dissolves after a certain period of time. Hope that helps.

6. i need an account for my us based organisation. im non resident of usa.
   i have ein number and all other documents of formation. can u kindly suggest how i can proceed with the application of bank account.

   • Hi Awar, we’ve written about an LLC bank account for non-US residents here: Non-US residents opening an LLC bank account. Hope that helps.

7. Hi, first of all I would like to thank you for access to all the information at one place it has immensely helped me. My question is suppose I start foreign owned LLC in Delaware and Wyoming and don’t do any business. i.e. 0 sales and 0 revenue. What tax liability do both the LLC has and when are they due for payment. Thanks.

   • Hi Sam, you’re very welcome. There is no income tax liability if there are no sales. If your LLC has 1 owner, you need to file Form 5472 (informational return) with the IRS. If your LLC has 2 or more owners, you need to file Form 1065 (informational return) with the IRS. Hope that helps.

8. Hi, Thanks for detailed instructions. Can you tell me which state does not require my name to be mentioned as Company Officials or Directors after forming as i want to have privacy? Thanks.

   • Hi Muk, it is a bit more complicated than that. There are nearly 20 states where neither Members or Managers are listed in the filing form (Articles of Organization, Certificate of Organization, or Certificate of Formation). However, you’ll also need to hire a Commercial Registered Agent and hire a company to form your LLC (so they sign as the LLC Organizer). Furthermore, you’ll want to look at the state’s Annual Report filing and see what is required there. On top of that, if your LLC is formed outside of the state where it’s transacting business, it’ll need to be registered as a foreign LLC in the state(s) where it is transacting business. So you’ll also need to examine the foreign LLC registration form (and strategize in a similar fashion). Thank you for your understanding and I hope that helps.

9. Hello, I live outside the USA I want to establish a company LLC. If I start my company now, will I pay state tax for this year?

   • Hi Ufuk, no, the Delaware LLC Franchise Tax is first due the year after your LLC is approved. If your Delaware LLC is approved anytime in 2021, your LLC’s first franchise tax payment is due by June 1, 2022. Hope that helps.

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