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.
The question of how much it costs to maintain an LLC (Limited Liability Company) in Delaware is one that many entrepreneurs and business owners are interested in, and for good reason. Delaware is a popular state for registering LLCs due to its business-friendly tax laws and lenient regulatory policies, making it an appealing destination for startups and companies alike.
However, many people tend to overlook the ongoing costs associated with maintaining their LLC in Delaware. While registering an LLC in Delaware may be relatively affordable, keeping up with annual fees, filing requirements, and other expenses can add up significantly over time.
The first and most obvious cost associated with maintaining an LLC in Delaware is the annual franchise tax. All LLCs, whether based in Delaware or outside it, are required to pay this fee to the state once a year in order to keep their business in good standing. The amount of the franchise tax varies depending on the LLC’s size and revenue, but it can range anywhere from a few hundred dollars to tens of thousands of dollars, making it a significant cost for many business owners.
Another ongoing cost that many LLC owners often overlook is the cost of hiring a lawyer. While an attorney may not be necessary for every aspect of running an LLC, having legal representation on hand can be invaluable when it comes to managing compliance, navigating regulatory requirements, and dealing with any legal issues that may arise. The hourly rate for a lawyer can vary greatly depending on their expertise and experience, and fees can add up quickly if an LLC needs legal advice frequently.
In addition to annual franchise taxes and legal fees, many LLCs in Delaware may also incur other costs such as filing fees, business licenses, permits, and compliance-related expenses. For example, an LLC operating in a regulated industry may need to invest in compliance software or hire compliance specialists in order to stay current with federal and state regulations.
All of these ongoing costs can be challenging for entrepreneurs and small business owners who are just starting out or operating on a tight budget. It is important for LLC owners to carefully evaluate their ongoing expenses and budget accordingly, taking into account all expenses and costs associated with maintaining their LLC.
In conclusion, while registering an LLC in Delaware may be an appealing option for many business owners, it is important to carefully evaluate the ongoing expenses and budget accordingly. LLC owners must be mindful of the annual franchise tax, legal fees, and other expenses that come with maintaining a business in the state of Delaware. By taking the time and effort to fully understand these costs, LLC owners can better plan for expenses and help ensure the long-term success of their business.
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.