Delaware is often the preferred state for forming limited liability companies (LLCs) because of its business-friendly legal environment. The state has a specialized court called the Court of Chancery that exclusively handles business disputes. This court operates without juries, providing quick and expert resolutions, and it uses judges knowledgeable in business law—often leading to more predictable legal outcomes that are favorable to business. Delaware’s laws also provide strong protections against personal liability for company directors, which makes it an even more attractive locale for risk-averse owners.

Delaware is also popular for the financial benefits it offers businesses. The state doesn’t impose corporate income tax on companies that operate outside its borders, even if they’re incorporated there, which can yield serious tax savings for companies that conduct business across states. The state also ensures a high degree of privacy for owners and doesn’t require them to disclose their identities in public filings. These factors, combined with the efficiency and relative predictability of Delaware’s legal system, make it a compelling choice for many businesses.

However, there are costs and fees involved with forming a Delaware LLC. Below, we’ll break down the financial obligations commonly associated with forming and maintaining an LLC in Delaware.

What’s in this article?

• How much does an LLC cost in Delaware?
  
• Cost breakdown for a Delaware LLC
  
• How to incorporate an LLC in Delaware
  

How much does an LLC cost in Delaware?

The minimum cost to form a Delaware LLC is $110 for the state filing fee. You should budget for additional expenses such as the franchise tax, registered agent fees, and fees for any applicable business licenses or professional services.

Cost breakdown for a Delaware LLC

The cost of forming and maintaining a Delaware LLC includes several types of fees, outlined below.

State filing fees

• One-time fee for a domestic LLC

• One-time fee for a foreign LLC

• One-time fee for a certified copy of your Certificate of Formation

Registered agent fee

• Annual fee set by the registered agent, which accepts legal documents and government correspondence on behalf of the business
  

Franchise tax

• Annual fee, due by June 1 each year
  

Business licenses

• One-time fee set by the specific industry and location jurisdiction

• Might be required, depending on the nature of business and local regulations

How to incorporate an LLC in Delaware

To incorporate an LLC in Delaware, follow these steps.

Choose a name

Select a unique name that complies with Delaware naming guidelines. It must include the words “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.”

The name cannot be identical or deceptively similar to an existing business entity in Delaware. You can check name availability on the Delaware Division of Corporations website.

Appoint a registered agent

Designate a registered agent who will receive legal documents and official correspondence on behalf of your LLC. The registered agent must have a physical street address in Delaware and be available during normal business hours. You can hire a registered agent service or act as your own agent if you have a Delaware address.

File a Certificate of Formation

Prepare and file a Certificate of Formation with the Delaware Division of Corporations. The certificate must include the LLC’s name, the registered agent’s information, and the purpose of the business.

You can file online or by mail, and the filing fee is $110 (as of August 1, 2024).

Create an operating agreement

Although not legally required in Delaware, creating an operating agreement is strongly recommended. This document outlines the ownership structure, management roles, operating procedures, and other important aspects of your LLC. It helps prevent disputes and provides clarity on how the LLC will be run.

Obtain an EIN

Apply for an Employer Identification Number (EIN) from the IRS. This number is used for tax purposes and is required to open a business bank account and hire employees.

Pay the franchise tax

Delaware LLCs must pay an annual franchise tax, due by June 1 each year. This tax is a flat fee regardless of your LLC’s revenue or activity. There is no requirement to file an annual report.

Comply with ongoing requirements

Maintain compliance with Delaware’s ongoing requirements for LLCs, such as maintaining a registered agent and paying the annual franchise tax.

How Stripe Atlas can help

Stripe Atlas sets up your company’s legal foundations so you can fundraise, open a bank account, and accept payments within two business days from anywhere in the world.

Join 75K+ companies incorporated using Atlas, including startups backed by top investors such as Y Combinator, a16z, and General Catalyst.

Applying to Atlas

Applying to form a company with Atlas takes less than 10 minutes. You’ll choose your company structure, instantly confirm whether your company name is available, and add up to four cofounders. You’ll also decide how to split equity, reserve a pool of equity for future investors and employees, appoint officers, and then e-sign all your documents. Any cofounders will receive emails inviting them to e-sign their documents, too.

Accepting payments and banking before your EIN arrives

After forming your company, Atlas files for your EIN. Founders with a US Social Security number, address, and cell phone number are eligible for IRS expedited processing, while others will receive standard processing, which can take a little longer. Additionally, Atlas enables pre-EIN payments and banking, so you can start accepting payments and making transactions before your EIN arrives.

Cashless founder stock purchase

Founders can purchase initial shares using their intellectual property (e.g., copyrights or patents) instead of cash, with proof of purchase stored in your Atlas Dashboard. Your IP must be valued at $100 or less to use this feature. If you own IP above that value, consult a lawyer before proceeding.

Automatic 83(b) tax election filing

Founders can file an 83(b) tax election to reduce personal income taxes. Atlas will file it for you—whether you are a US or non-US founder—with USPS Certified Mail and tracking. You’ll receive a signed 83(b) election and proof of filing directly in your Stripe Dashboard.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company. Atlas C corp documents are built in collaboration with Cooley, one of the world’s leading venture capital law firms. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects such as ownership structure, equity distribution, and tax compliance.

A free year of Stripe Payments, plus $50K in partner credits and discounts

Atlas collaborates with top-tier partners to give founders exclusive discounts and credits. These include discounts on essential tools for engineering, tax, finance, compliance, and operations from industry leaders like AWS, Carta, and Perplexity. We also provide you with your required Delaware registered agent for free in your first year. Plus, as an Atlas user, you’ll access additional Stripe benefits, including up to a year of free payment processing for up to $100K in payments volume.

Learn more about how Atlas can help you set up your new business quickly and easily, and get started today.