Perhaps you are hoping to form a Delaware LLC. People assume how to start an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Delaware.
On this page, you’ll learn about the following:
Delaware LLC Cost of Filing
Here are the costs involved in forming an LLC in Delaware.
Cost of Filing Formation Certificates
The Delaware Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Delaware Secretary of State.
Delaware Domestic LLC
- By Mail: Fill out the application form, and send it to Delaware Division of Corporations 401 Federal Street Suite 4 Dover, DE 19901 Costs $90
- Franchise Tax $300 (Annual) can be done online.
Delaware Foreign LLC
- By Mail: Fill out the application form, and send it to Delaware Division of Corporations 401 Federal Street Suite 4 Dover, DE 19901 Costs $200
- An additional certified copy costs $50
- Franchise Tax $300 (Annual) can be done online.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
Delaware LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in Delaware, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Delaware Department of Revenue for regulatory boards or agencies requiring licensing.
Delaware Business Privilege Tax and Annual Report
Once you have your EIN or Employer Identification Number, apart from filing sales tax, once the company has completed its 2.5 months as an LLC in Delaware, it needs to pay a Business Privilege Tax (BPT). This is a requirement for all LLCs formed in Delaware.
LLCs need to pay the tax before the third week of April, i.e, 15 April, and it can vary from 0.00025% to 0.000175% according to the net worth of the LLC. The exact rate will be obtained on the basis of the income of the previous taxable year. The minimum amount that the business will have to pay for this tax is $100.
Delaware Taxes to Be Paid By The LLCs
Delaware is said to be the tax shelter state of the United States. The reason behind this is it has flexible taxation for the Limited Liability Companies. Firstly, the state does not have any Sales Tax. No, tax is imposed on the businesses based on Sales within the Delaware boundary. The state has Franchise tax and corporate income tax for the businesses.
Delaware Franchise Tax
Franchise Tax in Delaware is paid annually on 1st June every year. Failing to pay on time, the LLCs can be fined $200 plus 1.5% interest upon the penalty. The amount of Franchise Tax is $300 and has to be paid by all LLCs irrespective of the size.
Franchise Tax does not mean one has to have a Franchise business. It is a general business tax every LLC and corporation in Delaware has to pay annually.
Corporate Income Tax
LLCs have the advantage of passing through income taxes. Hence, in Delaware, no LLCs have to pay corporate income taxes. However, the members have to pay income taxes separately according to their profit.
On the other hand, S Corporations do not have to pay any federal taxes. They have more tax benefits than LLCs. If an LLC wants, it can be filed as S Corporation by filing an IRS. In that case, the LLCs have to pay corporate income tax.
Cost Comparison Among States
Delaware is surrounded by states like Pennsylvania, Maryland, New Jersey, and Virginia. Here’s LLC cost comparison among the neighboring states of Delaware,
|State||Filing Fee||Annual Fee/Biennial Fee|
|Delaware LLC||$90||$300 (Annual)|
|Pennsylvania LLC||$125||$70 (Every 10 years)|
|New Jersey LLC||$125||$75 (Annual)|
|Maryland LLC||$100||$300 (Annual)|
|Virginia LLC||$100||$50 (Annual)|
- Delaware Name Reservation: $75 for online filings or by mail
- Doing Business As (DBA): $25 for online filing or by mail
- Certified Document Copies: $50 + $9 per page.
- Certificate of Good Standing: $50
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of Delaware LLC: $200
How Much Does It Cost to Maintain an LLC in Delaware
To maintain an LLC in Delaware you will need to pay an annual fee of $300 along with sales tax, business privilege tax, franchise tax, corporate income tax and federal taxes.
Creating an LLC in Delaware is simple. However, there are some costs that you may incur as you start your business. One of the costs you should be aware of is how much it costs to maintain an LLC in Delaware.
The cost of maintaining an LLC in Delaware will depend on a number of factors. These factors include whether you need to hire a professional service or whether you will have to pay for permits. Additionally, the fees you will pay to maintain your LLC will depend on the type of business you are running. For example, if you are a real estate agent, you may need to apply for certain permits.
Another cost that you should be aware of is the costs associated with reserving your LLC’s name. The fee for reserving a name in Delaware is $75. This will ensure that your business name will stay in place for at least 120 days. You can reserve your name online through the Delaware Division of Corporations website or by mail. Alternatively, you can opt to renew the reservation for another $75.
A third cost that you may have to pay to maintain an LLC in Delaware is the annual franchise tax. You must pay this tax every year. This tax is not required to be paid by LLCs that do not have employees. However, if you have employees, you will need to pay this tax on a yearly basis. If you fail to pay the franchise tax, you will be penalized.
One of the best ways to ensure that your Delaware LLC stays in good standing with the state is to obtain a certificate of good standing. The certificate of good standing can be obtained by ordering from the Department of State. It is also important to keep detailed records of all financial transactions. These records will include invoices and information on contractors and employees. Often, banks and lenders will require you to provide this information in order to open a business bank account.
Finally, you will need to obtain a business license. This is a state-mandated license that requires you to pay a fee to the Division of Revenue. These fees vary depending on the type of business you are running and where you are located. If you fail to obtain this license, you may be fined $200.
In addition to these fees, you may have to apply for professional licenses in order to operate your business. You can also apply for a business bank account to separate your personal and business expenses. A bank account is also important for taxation purposes. If you do not have a business bank account, you may have to pay taxes and fees on your personal income.
Ultimately, the costs associated with maintaining an LLC in Delaware are not too high. Those who are starting a new business may find that it is more affordable to set up a Delaware LLC than to set up a corporation. In addition, a Delaware LLC is easier to set up than a corporation.
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
The cost of Delaware is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.