How to start an LLC in Delaware: Your 2025 step-by-step guide

Thinking about launching a business in Delaware? One of the first steps is choosing the right business structure. Whether you set up as a sole proprietorship, partnership, corporation, or LLC, each comes with different legal, tax, and operational factors to consider.

Delaware is famous for being one of the most business-friendly states in the U.S., with laws that favor entrepreneurs and corporations alike. In fact, according to the Delaware Division of Corporations, over 66% of Fortune 500 companies are incorporated here, thanks to the state’s strong legal protections and flexible corporate laws.

For small businesses, LLCs are a popular choice, offering liability protection without the complexity of a corporation. Whether you're setting up shop in Wilmington’s bustling downtown, the beach towns of Rehoboth and Lewes, or the rapidly growing Newark area, Delaware offers a supportive environment for your new business to thrive.

Jump to:

• Why choose an LLC in Delaware?
• New business data in Delaware in 2025
• 5 steps for creating an LLC in Delaware
• Step 1: Choose a name for your Delaware LLC
• Step 2: Choose a registered agent in Delaware
• Step 3: Complete the Articles of Organization form and file your Delaware LLC
• Step 4: Get an Employer Identification Number (EIN)
• Step 5: Ongoing compliance and required filings
• Types of LLCs to consider in Delaware
• Costs of setting up an LLC in Delaware
• LLC Taxes in Delaware
• Frequently asked questions

Why choose an LLC in Delaware?

For entrepreneurs in Delaware, forming an LLC offers a balance of liability protection, flexibility, and tax advantages. This business structure shields personal assets like a corporation while allowing for pass-through taxation, meaning profits are only taxed at the individual level, avoiding corporate income tax in most cases.

This guide will walk you through the steps, costs, paperwork, and tax considerations for starting an LLC in “The First State.” Plus, it will cover how tools like accounting software can help you stay organized as you build your business.

New business data in Delaware for 2025

Delaware continues to solidify its position as a premier destination for business incorporation and economic growth. Over 2 million business entities have chosen Delaware as their legal home, attracted by the state's corporate laws, a highly respected judiciary, and a business-friendly government. To further bolster economic activity, the Division of Small Businesses promotes numerous initiatives and tax credits. 

Delaware's economy is anchored by several key industries. The state is a national leader in STEM-based industries and biotech, with strong advancements in pharmaceuticals, chemicals, medical devices, and computer services. Delaware remains a powerhouse in fintech and financial services and is home to major institutions like Bank of America, Barclays, and JPMorgan Chase. 

Other major industries include food and agriculture, manufacturing and logistics, education, and healthcare. According to the non-profit Delaware Department of Prosperity, there are over 113,000 jobs in education and healthcare.

With a strong business climate, key industry growth, and ongoing investment in economic development, Delaware remains an attractive place for businesses to launch, expand, and thrive.

5 steps to forming an LLC in Delaware

Starting an LLC is an exciting move for any entrepreneur. Establishing your Delaware business requires selecting a unique name, filing official paperwork, obtaining an Employer Identification Number (EIN), and other necessary tasks. The next sections break it all down.

Step 1: Choose a name for your Delaware LLC

The first step is to select the right name for your LLC. This will establish your business identity and serve as the legal identifier of your company. While you can be creative, your name must adhere to Delaware's specific naming regulations.

Delaware LLC naming rules

When choosing a name for your LLC in Delaware, there are specific guidelines you must follow:

LLC designation 

• The name must include one of the following LLC designations:
• Limited Liability Company
• L.L.C.
• LLC 

Uniqueness

• Your chosen name must be distinguishable from existing entities registered in Delaware.

Avoid restricted words

• Certain words are restricted or require additional approval, especially those implying association with regulated industries or government entities. These may include:
• “Bank”
• “Medical”
• “Inc.”

Check for name availability in Delaware

Once you've selected a name for your business, ensure it's unique and complies with Delaware's naming regulations. Use the Delaware Division of Corporations' Name Reservation tool to check if your desired business name is available. 

Keep in mind that Delaware has specific rules to ensure business names are distinguishable. For example, the following differences may not be enough to make a business name legally unique in Delaware:

• Suffix variations (e.g., "Inc." vs. "LLC")
• Articles (e.g., "the," "a," "an")
• Conjunctions (e.g., "and" vs. "&")
• Singular vs. plural forms (e.g., "Home" vs. "Homes")
• Numeric representations (e.g., "five" vs. "5")

When searching for name availability, focus on your preferred core name without these variations.

Reserving your LLC name

While reserving a business name in Delaware is not required, it can help secure your preferred name while you complete the registration process. The Delaware Division of Corporations allows you to reserve a business name for 120 days for a $75 fee per name. 

Reservations can be completed online through the Delaware Division of Corporations or you can submit a written request.

Step 2: Choose a Registered Agent in Delaware

LLCs in Delaware are required to appoint a Registered Agent. The Registered Agent acts as the official point of contact for your business’s legal documents and correspondence.

Who needs a Registered Agent?

• All Delaware LLCs: Every domestic LLC must designate a Registered Agent.
• Foreign LLCs: LLCs formed outside Delaware but registered to do business within the state must also appoint a Registered Agent in the state of Delaware. 

Who can be a Registered Agent in Delaware?

• Your Registered Agent can be:
• An individual resident of Delaware
• A Delaware business entity such as a corporation, LLC, LLP, LP, or statutory trust
• A foreign business entity (corporation, LLC, LLP, LP, or statutory trust) that is authorized to do business in Delaware
• The business itself, if it is physically located in Delaware
• Registered Agent service: If you prefer not to receive legal documents at your personal or business address, consider hiring a professional Registered Agent service. These companies provide a physical street address in Delaware for your LLC to receive documents. 
• Your Registered Agent must:
• Have a physical street address in Delaware (P.O. boxes are not accepted)
• Be available during standard business hours to accept legal documents (Service of Process)
• Forward legal documents to the business they represent in a timely manner
• Provide billing and tax information as required
• Maintain accurate records of the business contacts they represent

If your business does not have a physical location in Delaware, you must designate a Registered Agent service that meets these requirements. For more information regarding Registered Agents, visit the Delaware Division of Corporations website. 

Choosing a Resident Agent service

There are professional Resident Agent services throughout the state. If you’re thinking about hiring a provider, here are some tips for finding the right one.

Research and compare

Be sure to research different providers and compare factors such as:

• Cost: Fees typically start around $50 per year.
• Reputation: Choose a reputable company with a proven track record.
• Customer support: Ensure they provide excellent customer service and support.
• Knowledge: Select a provider with a strong understanding of Delaware-specific compliance requirements to ensure your business stays in good standing.
• Coverage: For businesses operating in multiple states, choose a provider that offers services across all the states where you plan to operate.

Consider bundled services

If you're using a company formation service or an attorney to set up your LLC, they may offer resident agent services as part of a package.

Step 3: Complete the Certificate of Formation and file your Delaware LLC

Once you’ve decided on your name and your registered agent, the next step is to file a Certificate of Formation.

What is the Certificate of Formation?

The Certificate of Formation is a legal document filed with the Delaware Division of Corporations to create an LLC. This document includes essential details such as your LLC's name and the name and address of your registered agent.

You have two options for obtaining and submitting the form:

Option 1: Online

File through the Delaware One Stop registration and licensing online portal.

Option 2: Mail-in filing

Download and complete the Certificate of Formation form from the Delaware Division of Corporations' website.

Mail the completed form, along with the $90 filing fee, to:

Delaware Division of Corporations

401 Federal Street – Suite 4

Dover, DE 19901

How long does it take for an LLC to get approved in Delaware?

Processing times can vary based on the method of submission and the current workload of the Division of Corporations. All business entity documents are examined by the division staff to verify compliance with Delaware law. Online filings are typically processed more quickly than mail-in submissions. Expedited services are available. 

Step 4: Get an Employer Identification Number (EIN)

You’ll likely need an Employer Identification Number (EIN) from the Internal Revenue Service to form an LLC in Delaware. An EIN is a nine-digit number that identifies a business for tax purposes, similar to a Social Security Number for your company.

According to the IRS, you need an EIN if any of the following apply:

1. You have employees.
2. Your business operates as a corporation or partnership.
3. You file employment, excise, or alcohol, tobacco, and firearms tax returns.
4. You withhold taxes on income, other than wages, paid to a non-resident alien.
5. You have a Keogh plan (a tax-deferred pension plan).
6. You are involved with certain types of organizations, including trusts, estates, real estate mortgage investment conduits, non-profit organizations, farmers' cooperatives, or plan administrators.

Single-member LLC considerations

If you are a single-member LLC, you may not be required to obtain an EIN. However, getting one is still a smart idea, as your business needs might change over time, and obtaining an EIN is free.

An EIN becomes mandatory if your LLC elects to be taxed as a corporation, hires employees, or files excise or employment tax returns.

Having an EIN also simplifies opening a business bank account and protects your personal Social Security Number, reducing the risk of identity theft.

Requesting an EIN

You can request an EIN by mail or phone, but the fastest method is completing the process online on the IRS website. After obtaining an EIN, use accounting software to track business expenses and ensure your company’s finances remain separate from your personal finances. 

Step 5: Ongoing compliance and required filings 

Establishing your Delaware LLC is just the beginning. To maintain good standing and ensure compliance with state regulations, it's essential to adhere to ongoing requirements:

• Annual Franchise Tax
• Requirement: All domestic LLCs, Limited Partnerships (LPs), and General Partnerships (GPs) formed or registered in Delaware must pay an annual tax of $300. 
• Due date: On or before June 1st each year. 
• Penalties: Failure to pay by the deadline results in a penalty of $200, with interest accruing at 1.5% per month on both the tax and penalty.
• Business licenses and permits

Delaware state business license

• Requirement: Anyone conducting business in Delaware must obtain a Delaware business license from the Delaware Division of Revenue, even if the business operates outside the state. A license is required upon starting operations.
• How to register: Register online via the One Stop Business Licensing and Registration Service.

Local business licenses and permits

• Requirement: Some local governments may require an additional city or county business license or permit.
• How to register: Contact your local government offices for specific requirements.

Professional and industry-specific licenses

• Requirement: Certain professions require additional licensing from the Delaware Division of Professional Regulation. 
• How to register: Check licensing requirements at the Division of Professional Regulation. The Business First Steps webpage also has an index of Delaware business license and registration requirements.
• Beneficial Ownership Information Report
• Filing requirement: Submit a Beneficial Ownership Information Report to the U.S. Department of the Treasury within 30 days of forming your LLC.
• Purpose: This report helps prevent money laundering and other financial crimes by identifying the true owners of the LLC.
• Who needs to file: All LLCs formed in 2024 or later are required to file.
• How to file: File the report online through the U.S. Treasury Financial Crimes Enforcement Network website.
• Fees: There is no filing fee.
• State and gross receipts tax registration
• Requirement: Delaware does not have a sales tax, but businesses must register for a gross receipts tax with the Delaware Division of Revenue.
• Tax determination: Gross receipts tax applies to total business revenue with rates varying by business.
• Registration: Register online via Delaware One Stop or by mail using the Combined Registration Application (CRA) form.
• Withholding tax (for employers)
• Requirement: Businesses with employees must withhold Delaware state income tax from wages and remit it to the Division of Revenue.
• Registration: Employers must register for withholding tax through Delaware One Stop.
• Purchase insurance
• Requirement: Depending on the type of business you operate, you may also need to get specific insurance coverage, such as:
• Workers’ compensation insurance (mandatory for employers with one or more employees)
• Commercial auto insurance 
• Liability insurance
• Information: For guidance on insurance requirements and recommendations, refer to the Small Employer Insurance Guide provided by the Delaware Department of Insurance.

Types of LLCs to consider in Delaware 

When establishing an LLC in Delaware, it's important to understand the different types available to determine which best suits your business needs.

Single-member LLC

A single-member LLC is owned by one individual or entity, providing liability protection while allowing for simplified management and taxation. In Delaware, a single-member LLC that does not elect to be treated as a corporation will be classified as a "disregarded entity," meaning the business activities are reported on the owner's personal tax return.

Multi-member LLC

A multi-member LLC consists of two or more members who share ownership. This structure offers flexibility in management and profit distribution among members. Multi-member LLCs are typically treated as partnerships for tax purposes unless they elect to be taxed as a corporation.

Series LLC

Delaware allows the formation of series LLCs, where a single LLC can have multiple series, each with separate assets, liabilities, and members. This structure provides liability protection between series, ensuring that the liabilities of one series do not affect the assets of another, provided that separate records are maintained and notice of liability limitations is included in the LLC's Certificate of Formation.

Manager-managed LLC

In a manager-managed LLC, members appoint one or more managers to handle the daily operations, allowing non-managing members to act as passive investors.

Member-managed LLC

A member-managed LLC involves all members actively participating in the management and decision-making processes of the company. In Delaware, an LLC is typically member-managed unless it is explicitly designated as manager-managed in its operating agreement.

Costs of setting up an LLC in Delaware

Setting up a limited liability company in Delaware involves several fees: 

• A $90 one-time fee to file your Certificate of Formation
• Registered Agent service fees, if applicable, which typically start at $50 a year
• All Delaware LLCs must pay an annual franchise tax fee of $300

Other costs you may have to cover include late fees if you file any required paperwork after its due date and license or permit fees if your business operates in a regulated industry.

Open a Delaware LLC business bank account

Establishing a separate business bank account is crucial for maintaining the liability protection that a Delaware LLC offers. This separation ensures that your personal assets remain distinct from your business finances, preserving the integrity of your LLC's limited liability status. 

A dedicated business bank account also simplifies accounting and tax preparation by clearly delineating business transactions. Plus, it demonstrates professionalism and credibility to clients and vendors. 

What you'll need 

When opening a business bank account, you’ll typically need:

• Your EIN 
• A certified copy of your Certificate of Formation
• (Possibly) an operating agreement
• Personal identification

Out-of-state residents should consider choosing a bank with a presence in the state.

After opening your bank account, use QuickBooks accounting software to track and manage your finances.

LLC taxes in Delaware 

Delaware LLCs can be classified differently for federal tax purposes. They may be treated as a sole proprietorship (for single-member LLCs), partnership, C corporation, or S corporation. This classification affects how the LLC is taxed at both the federal and state levels.

Federal tax classification

Similar to federal guidelines, Delaware LLCs can choose their tax classification:

• Single-member LLCs: Automatically treated as disregarded entities, with income and expenses reported on the owner's personal tax return.
• Multi-member LLCs: Default to partnership taxation, requiring the filing of Form 1065 with the IRS.
• Election as a corporation: LLCs can opt to be taxed as a C corporation or S corporation by filing the appropriate forms with the IRS.

State income tax

Delaware's tax treatment aligns with federal classifications:

Pass-through entities

LLCs that do not elect corporate taxation pass profits and losses to members, who report them on their personal state income tax returns. Delaware's personal income tax rates are progressive, ranging from 2.2% to 6.6%, depending on income levels.

C Corporations

LLCs electing to be taxed as C corporations are subject to Delaware’s corporate income tax. As of 2025, the corporate income tax rate is 8.7% on federal taxable income allocated and apportioned to Delaware.

Annual franchise tax

All Delaware LLCs are required to pay an annual franchise tax of $300, due on or before June 1st each year.

Gross receipts tax

Delaware imposes a gross receipts tax on the total gross revenues of a business. This tax is levied on the seller of goods or services, not the consumer. Rates vary by business activity, ranging from 0.0945% to 0.7468%.

Employment Taxes

LLCs with employees must comply with state employment tax requirements:

• Withholding tax: Employers must withhold Delaware state income tax from employee wages and remit it to the Division of Revenue. 
• Unemployment insurance tax: Employers are required to pay unemployment insurance taxes, with rates assigned annually based on factors such as the employer's experience rating and the state's Average High-Cost Multiple (AHCM).

Delaware-related resources

• Delaware Division of Corporations: Facilitates business entity formations, maintains corporate records, and provides services such as name reservations and annual report filings.
• Delaware Division of Revenue: Manages state tax collection, issues business licenses, and offers resources to ensure compliance with Delaware's tax laws.
• Delaware Department of Insurance: Regulates the insurance industry within the state, offering oversight, consumer protection, and educational resources to both businesses and residents.
• Delaware One Stop: An online portal that streamlines business registration processes, allowing entrepreneurs to obtain licenses, register for taxes, and access various state services efficiently.
• Division of Small Business: Provides support and resources to small businesses, including assistance with navigating government processes, connecting with business support organizations, and exploring funding opportunities.
• Delaware Department of Labor: Offers workforce development services, enforces labor laws, and provides resources related to workers’ compensation and unemployment insurance, ensuring businesses comply with employment standards.

Federal-related resources 

• Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.
• Internal Revenue Service (IRS): The IRS provides essential information for LLCs, including tax classifications, employer identification numbers (EINs), and filing requirements. Its Small Business and Self-Employed Tax Center offers guidance on tax obligations specific to LLCs.
• U.S. Patent and Trademark Office (USPTO): For businesses looking to protect their intellectual property, the USPTO provides resources on how to apply for patents and register trademarks, which can be essential for safeguarding your unique products or services.
• U.S. Department of Labor (DOL): The DOL's website offers information on federal labor laws, workplace safety regulations, and employee benefits that LLC owners need to consider when hiring staff.

Disclaimer: 

This content is for information purposes only and information provided should not be considered legal, accounting or tax advice or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.