Delaware is home to nearly 70,000 small businesses and that number is rising every day. Each year, new individuals look into how to form an LLC in Delaware and start participating in the area’s booming economy.
If you’re one of those individuals who are interested in learning how to register an LLC in Delaware, you might want to consider creating an LLC operating agreement as part of the process.
Is an LLC Operating Agreement Required in Delaware?
An LLC operating agreement is required in Delaware.
Having a Delaware LLC Operating agreement might seem tedious, but there’s a reason why the state government requires this document.
A Delaware operating agreement is important for laying out the rights, duties, and roles of members of the organization. And, it’s important for dictating how the company will run its operations.
Delaware Operating Agreement Laws
If you’re looking into how to get an LLC in Delaware you might want to check out the state’s current operating agreement laws – § 18-101 – § 18-1109. That way, when you write your operating agreement, you’ll know that you’re fully compliant.
In Delaware, operating agreements can be either written, oral, or implied. That means that you don’t have to create a paper copy of your operating agreement in order for it to be considered legal.
Delaware law also states that LLC operating agreements need to define clear member roles, rights, and responsibilities. They should also lay out how to close down the business.
You should also keep in mind the state rules for naming your LLC. It must contain ‘Limited Liability Company’ or the abbreviation ‘L.L.C.’ or ‘LLC’. It can also contain the names of members, or the words ‘Club’,’”Foundation’, ‘Fund’, ‘Institute’, ‘Society’, ‘Union’, ‘Syndicate’, or ‘Trust’.
Other elements you need to be aware of are in regard to appointing an agent:
- If the LLC is physically located in Delaware, it may act as its own registered agent
- A registered agent may be either an individual resident or business entity that is authorized to do business in Delaware
- The registered agent must have a physical street address in Delaware
How Much Does it Cost to Form an LLC in Delaware?
In Delaware, it will cost you a total of $140 to start a domestic LLC. That includes a $90 domestic LLC fee to file your articles of organization as well as a $50 fee to receive your state business license.
How to Form an LLC in Delaware?
So, now that we’ve covered the basics of LLCs, it’s time to take a look at how to apply for an LLC in Delaware. Here are the steps that you’ll need to take to get started creating your Delaware business:
Step 1 – Choose a Business Name
The first step for anyone wanting to start an LLC in Delaware is to choose a business name.
You’ll need to make sure that your LLC’s name hasn’t already been claimed. And, the business name can’t be one that’s too similar to an already existing business.
If you want to register your business name ahead of time, you can do that by paying a small fee. It will cost you $75 to reserve your LLC name while you get your paperwork in order.
Step 2 – Choose a Registered Agent
Once you’ve selected your business name, it’s time to look for a registered agent. A registered agent is a person who handles legal and government papers on behalf of the Delaware LLC.
Your registered agent can either be an individual with Delaware residency or a business that operates out of Delaware. Either way, your agent needs to have a physical street address in the state.
Step 3 – File Your Certificate of Organization
The next step of the process is to file your certificate of formation of a limited liability company.. You’ll do this by mailing your paperwork to the Delaware Division of Corporations.
Make sure that your certificate includes the LLC’s name as well as the registered agent’s name and address. It should also contain the signature of the LLC’s organizer.
Step 4 – Write Your Operating Agreement
Once you’ve paid your filing fees and submitted all your paperwork, it’s time to write up your operating agreement. This step is important for staying compliant and protecting yourself and your company.
In your operating agreement, you should carefully lay out how the company will be managed and what responsibilities each member will have. Once you’ve written the agreement, you can submit it to the state government to prove the credibility of your business entity.
Step 5 – Get an EIN
The last step of opening an LLC in Delaware is to register for an Employer Identification Number, also called an EIN. This number is given out by the IRS and is used to track business taxes and transactions.
It’s completely free for you to register your business for an EIN. Doing so will enable you to hire employees, open a bank account, get loans, and open credit card accounts.
Delaware LLC Operating Agreement Template
Now that you know how to create an LLC in Delaware, it’s time to check out a Delaware operating agreement template:
