Forming a Delaware LLC: from the Certificate of Formation to $400 a year

Form a Delaware LLC and you choose the company law of a small East Coast state that sets the standard across the US. The formation itself is quick: one form, one fee, one Registered Agent. What comes next decides how much work and money it takes. This page walks you through the steps in the right order, from the name to the annual tax, and explains the point many founders miss: an LLC with a real business also registers in the state where it operates. If you'd rather not handle the formation yourself, you'll find our offer on the page Form an LLC in Delaware. Which state suits your LLC in the first place is compared in the article Choosing the right state.

1What a Delaware LLC is and what it's good for

The limited liability company combines the limited liability of a corporation with the flexibility of a partnership. Delaware's statute, the Delaware Limited Liability Company Act in Title 6, Chapter 18 of the Delaware Code, makes it a legal entity in its own right: the LLC comes into existence when its Certificate of Formation is filed and exists as a separate legal person until that certificate is canceled.

Delaware has earned this reputation over decades. According to the Division of Corporations' 2025 annual report, more than 2.28 million entities are registered there, including more than two thirds of the Fortune 500. Disputes among owners go to the Court of Chancery, a specialized business court that, according to the state, has existed for more than 225 years and has shaped much of modern American corporate law. Appeals go straight to the Delaware Supreme Court.

Who is it worth it for? Founders who work with partners or investors and need a rulebook that American lawyers, investors and courts understand instantly. Entrepreneurs who plan to put a holding company over several US businesses later. And anyone negotiating a detailed LLC Agreement, because Delaware follows such contracts almost entirely. If, on the other hand, you're forming on your own and running your whole business in Texas or Florida, Delaware often means paying twice, as the section on registering in other states shows.

1.1What Delaware is not

Delaware is not a place where a company doing business in the US pays no tax. Federal taxes are the same in every state, and state taxes follow the place where the business happens. What Delaware offers is law: a mature statute, an experienced court and a public register that reveals very little about the owners. More on the myths around the state in Delaware for Dummies.

2Step by step to the Certificate of Formation

2.1The name

It all starts with the name. Under § 18-102, it must contain the words "Limited Liability Company", the abbreviation "L.L.C." or the designation "LLC", and it must be distinguishable on the register from the names of entities already registered or reserved there. The Division of Corporations' Entity Search shows whether a name is available. If you want to secure a name for later, you can reserve it for 120 days; the state charges $75 for this. It isn't required.

2.2The Registered Agent

Every Delaware LLC must maintain a registered office and a Registered Agent in Delaware at all times, as § 18-104 requires. The Registered Agent accepts lawsuits and official mail on the company's behalf and forwards them. Its business office is at the address of the registered office, and that address gives the street, number, city and ZIP code. Most founders from Europe hire a commercial provider for this. What a Registered Agent does and how it differs from a business address is explained in the article Registered Agent and business address.

2.3The Certificate of Formation

The formation document is short. Under § 18-201, it states the LLC's name, the address of the registered office and the name and address of the Registered Agent, plus anything else the members choose to include. Members and managers are not listed. It must be signed by a person empowered to do so, whom the statute calls an authorized person. The Division of Corporations' form can be filed electronically through the state's document service or by mail.

The LLC comes into existence at the moment of filing or at a later time stated in the certificate. Delaware doesn't publish a fixed processing time for the standard route. If you're in a hurry, you can pay for processing within 24 hours, the same day or even within one hour. The fees are in the table.

3The LLC Agreement: freedom of contract under Delaware law

Your LLC's most important document is never filed anywhere. The LLC Agreement, called an Operating Agreement in other states, governs ownership, profit distribution, management, voting rights, exit and succession. The statute defines it broadly: it can be written, oral or implied, and it is valid even if the LLC has only one member. It can be made before, at or after the filing of the certificate.

The heart of Delaware law is in § 18-1101: the statute aims to give maximum effect to the principle of freedom of contract and to the enforceability of LLC Agreements. This leads to a feature European members rarely expect. The duties of members and managers, including fiduciary duties, can be expanded, restricted or even eliminated by the agreement. Only the implied contractual covenant of good faith and fair dealing cannot be waived.

3.1Who runs the LLC

Absent other provisions, the members run the LLC themselves, in proportion to their share of profits; whoever holds more than 50 percent decides. The agreement can instead appoint one or more managers, who then hold the management. For a subsidiary of your company at home, the manager route is often the right fit, because it separates management from ownership, just as you know it from company law at home.

3.2Protection from a member's creditors

If a creditor has a judgment against a member, in Delaware it can only obtain a charging order, meaning a claim to the distributions attributable to that interest. § 18-703 expressly rules out foreclosure, sale or any other access to the interest, for single-member and multi-member LLCs alike. Other states are less generous here; Florida, for example, may allow the interest of a single-member LLC to be sold at auction in certain circumstances.

What belongs in a good agreement, from capitalization to the rule for a member's death, is covered in the article Operating Agreement: what to include.

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4After formation: EIN, BE-13 and registration in the state where you do business

4.1The EIN

No tax number, no bank account and no tax return. The LLC applies to the IRS for its Employer Identification Number using Form SS-4. The online application is only open to applicants with a residence, principal place of business or office in the US whose responsible party has an SSN, ITIN or EIN. Founders from abroad apply by fax, by mail or, as international applicants, by phone.

4.2The BE-13 report

Many founders have never heard of it: if a foreign person holds at least 10 percent of the voting rights in a new US company, the Bureau of Economic Analysis requires a report under 15 CFR 801.7, even without being asked. The deadline is the 45th day after the US business is formed.

4.3Registering where you work

This is where a Delaware LLC on paper differs from a Delaware LLC with a real business. Every state requires a company from another state to register separately before doing business there. Texas sets this out in § 9,001 of its Business Organizations Code. Florida bars an LLC from another state from operating there without a Certificate of Authority and, on top of the back fees, penalizes violations with a fine of at least $500 and at most $1,000 for each year. California requires registration with the Secretary of State and, on top of that, an annual tax of $800 from every LLC doing business there.

What this means for you: if you run your business in one of these states, your Delaware LLC carries two Registered Agents, two sets of annual fees and two sets of filings. That can be worth it when Delaware law matters to your members. It is unnecessary if you are forming on your own and need none of it. How registering in another state works is explained in our article on foreign qualification.

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5The $400 annual tax and what happens if you pay late

Delaware does not require an annual report from an LLC. Instead, every LLC formed or registered in Delaware pays a flat annual tax. Under § 18-1107 it is $400. It is due on June 1 after the end of the calendar year, so the tax for 2026 is due on June 1, 2027. There is no proration for the year of formation: form in December and you pay the full tax for that year. The amount used to be $300 and was raised by 85 Del. Laws c. 273. Some Division of Corporations pages still show the old figure; the statute is what counts, and the state's own formation form also states $400.

Pay after June 1 and you pay more. The statute adds a $200 penalty to the tax, and interest of 1.5 percent accrues on the unpaid amount for each month or part of a month. The LLC loses its good standing. As long as the tax is outstanding, Delaware accepts no filings for it and issues no Certificate of Good Standing, which banks and business partners routinely ask for. If the tax goes unpaid for three years, the Certificate of Formation is canceled on the third anniversary of the due date.

5.1Registered series

Delaware allows series within a single LLC, each with its own members, assets and purposes. Each registered series owes its own annual tax of $100. For a single operating business you do not need a series. It becomes interesting when you want to hold several separate pools of assets, such as individual properties, under one roof.

6Taxes: what Delaware, the IRS and your home country want

For federal tax, what matters is not Delaware but how the LLC is classified. Under 26 CFR 301.7701-3, absent an election, a domestic LLC with two or more members is a partnership, and a single-member LLC is disregarded as an entity separate from its owner. With Form 8832 the LLC can elect to be taxed as a corporation instead. The effective date of the election can be no more than 75 days before and no more than twelve months after filing.

If the LLC is owned by a foreign member, reporting obligations are added. A single-member LLC with a foreign owner is treated as a reporting corporation for Form 5472 and files the form every year with a pro forma Form 1120. For a missing or late Form 5472, the IRS imposes a $25,000 penalty. More on this under Form 5472 and pro forma 1120. A multi-member LLC files Form 1065.

Delaware itself charges the LLC its annual tax. Which state income taxes apply to the profit depends on the state where the business actually takes place and on that state's rules for members based elsewhere. And back home? How the tax authority in your home country classifies the LLC is a separate question, and forming in Delaware doesn't answer it. You'll find the basics under Taxation of the US LLC and Your US company and taxes in your country of residence.

6.1What FinCEN no longer requires

Beneficial ownership information reporting to FinCEN no longer applies to companies formed in the United States. FinCEN made this exemption permanent with a final rule that took effect on August 14, 2026.

7When the LLC is closed down

The end follows a set sequence too. The LLC is dissolved, its affairs are wound up, and then it files a Certificate of Cancellation. Delaware charges $220 for this and first requires the full annual tax for the calendar year in which the cancellation takes effect, plus any unpaid taxes from earlier years. Simply abandon an LLC and you keep paying until Delaware cancels it itself after three unpaid years, with penalties and interest running until then. The federal side also wants a final return. How to do it cleanly is explained in our article Dissolving a US LLC.

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Whether a Delaware LLC fits your plans or you should form directly in the state where you do business comes down to your members, investors and location. Once you have decided, we form your LLC in Delaware with you. And if the LLC is to become part of a larger structure, read on about the Delaware holding.

In short

• A Delaware LLC is created by filing a Certificate of Formation with the Division of Corporations; the state charges $110 and the certificate states only the name, registered office and Registered Agent.
• The LLC agreement is not filed; under § 18-1101 Delaware gives it maximum freedom of contract, up to and including limiting fiduciary duties.
• Every year the LLC pays $400 in tax by June 1 of the following year; there is no annual report, but paying late brings penalties and the loss of good standing.
• If you run the business in Texas, Florida or California, you also register the Delaware LLC there and carry the obligations of both states.
• If the LLC is owned by a foreign member, it files Form 5472 every year; BOI reporting to FinCEN no longer applies to companies formed in the US.

How we help you

• Form an LLCThe US LLC with a permanent establishment, turnkey in six states.
• Apply for an EINYour company's US tax ID, applied for by us.
• LLC and LP Tax ReturnForm 1065 and K-1 for your LLC or LP.
• Zero Tax Return LLCPro forma Form 1120 and Form 5472 for the single-member LLC.
• Company formation consultationEntity type, state and tax consequences, before you commit.