delaware fees for llc [Definitive Guide]



Last updated : Aug 25, 2022
Written by : Nedra Mazzarella
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delaware fees for llc

Is there an annual fee for an LLC in Delaware?

LLC/Partnership Tax Information All Domestic and Foreign Limited Liability Companies, Limited Partnerships, and General Partnerships formed or registered in Delaware are required to pay an annual tax of $300.00. There is no requirement to file an Annual Report.

How much does it cost to maintain a Delaware LLC?

While the State of Delaware does not require LLCs to file an annual report, there is still an associated annual LLC fee. The Delaware Franchise Tax is $300 per year, due on June 1. This $300 annual LLC fee is standard protocol for every LLC, regardless of its age, gross sales, activity or periods of inactivity.

Does Delaware have LLC tax?

Delaware treats a single-member “disregarded entity” as a sole proprietorship for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the State of Delaware.

How much is Delaware franchise fee?

Read on to find out how much you'll pay, or visit our Delaware Franchise Tax calculator app for a quick answer. The Franchise Tax for a Delaware LLC or a Delaware LP is a flat annual rate of $300. A non-stock/non-profit company is considered exempt by the State of Delaware.

Why is it better to form an LLC in Delaware?

No sales tax if the LLC doesn't do business in the state. No tax on intangible income, like trademark royalties, making Delaware an excellent choice for holding companies that own intellectual property.

What happens if you don't pay Delaware LLC tax?

If you don't pay the Delaware Franchise Tax and file the Annual Report for two straight years, the State of Delaware will administratively dissolve the Corporation. If you have any questions about forming your new Delaware LLC, LP, or Corporation, give us a call today.

How much is Delaware LLC Franchise Tax?

Although Limited Partnerships, Limited Liability Companies and General Partnerships formed in the State of Delaware do not file an Annual Report, they are required to pay an annual tax of $300.00. Taxes for these entities are due on or before June 1st of each year. Penalty for non-payment or late payment is $200.00.

How long does it take to get an LLC in De?

Expedited Processing Time to process your corporation or LLC formation varies by state with routine processing taking 4 - 6 weeks or even more in the slowest states. Expedited Processing will reduce that time to about 10 business days or less with the exception of just a few states.

Why is Delaware a tax haven?

What makes Delaware a tax haven? Companies and wealthy individuals can use Delaware to avoid paying some taxes in other states. So there's a thing called the Delaware Loophole, which essentially enables companies to avoid paying state corporate income tax where they earn the revenue.

Do I have to renew my LLC Every year in Delaware?

LP/LLC/GP Tax Although Limited Partnerships, Limited Liability Companies and General Partnerships formed in the State of Delaware do not file an Annual Report, they are required to pay an annual tax of $300.00. Taxes for these entities are due on or before June 1st of each year.

What is the best state to open a LLC?

  1. Delaware. Delaware has a longstanding reputation for being one of the most business-friendly states in the nation.
  2. Nevada. Nevada is another state that draws a lot of attention from business owners who want to avoid paying high taxes.
  3. Wyoming.
  4. Alaska.
  5. South Dakota.

Does a Delaware LLC need to file a federal tax return?

An LLC will typically be required to file the same federal tax forms as a partnership or sole proprietorship when it comes time to prepare and file the federal tax returns with the IRS. An LLC may elect to be treated and taxed as an S corporation or a C corporation by the IRS.

How do I avoid franchise tax in Delaware?

There are ways to reduce your Delaware franchise costs in certain circumstances. To reduce the taxes paid by a startup, use the Assumed Par Value method. This method calculates the taxes by total assets. As long as your issued shares constitute a third to half of your authorized shares, this method will save you money.

How do I pay an LLC in Delaware?

  1. Provide your LLC's File Number.
  2. Read and review the franchise tax report.
  3. Click on “Pay Full Amount.”
  4. Select the drop-down option on the “Payment Type” section.
  5. Fill out the form and provide your name, billing information, phone, and email.
  6. Click the “Submit” button.

What taxes do you pay in Delaware?

Delaware has a graduated tax rate ranging from 2.2% to 5.55% on income under $60,000. The maximum income tax rate is 6.60% on income of $60,000 or over.

What is Delaware business tax?

Delaware has a 8.70 percent corporate income tax rate and also levies a gross receipts tax. Delaware does not have any state or local sales taxes. Delaware's tax system ranks 16th overall on our 2022 State Business Tax Climate Index.

Is it worth incorporating in Delaware?

The advantages of incorporating here include: The state offers some tax benefits. Delaware doesn't impose income tax on corporations registered in the state which don't do business in the state. Also, shareholders who don't reside in Delaware need not pay tax on shares in the state.

Do I have to live in Delaware to incorporate their?

Do I have to live in Delaware to incorporate there? No, you do not have to live or even do business in Delaware to incorporate your company there. You will, however, have to hire a registered agent with an address within the state to accept lawsuits and other legal documents on your company's behalf.

What happens if I don't dissolve my LLC in Delaware?

If you don't file the Certificate of Cancellation, the LLC will continue to accumulate Delaware franchise tax annually. Failure to settle the tax will lead to an administrative dissolution when the franchise tax goes into arrears.

How does Delaware calculate franchise tax?

Divide your total gross assets by your total issued shares carrying to 6 decimal places. The result is your “assumed par”. Example: $1,000,000 assets, 485,000 issued shares = $2.061856 assumed par. Multiply the assumed par by the number of authorized shares having a par value of less than the assumed par.


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delaware fees for llc


Comment by Leroy Bullmore

hi guys welcome to the simplify llc channel in this video we're going to explain the llc cost in delaware real quick make sure you hit the like button and press that bell icon to subscribe so that you can be notified when we push out more helpful content alright let's dive right in so delaware offers a tax-friendly environment and has pro-business laws making it an excellent formation state for businesses including llcs incorporating in delaware is pretty straightforward the state lays out all the information on submissions business license applications and an llc operating agreement conclusions its legal tax minimization policies make it a tax haven and it provides greater financial privacy to business owners you can watch our video about how to start an llc in delaware for more information that link is in the description box below all right now that we know some of the reasons why delaware makes a great formation state let's get down to the costs of forming and running an llc in the state let's start with the formation costs in delaware the cost of formation is 90 for domestic llcs this is the state filing fee for the initial certificate of formation to the delaware division of corporations in other states it's called the articles of organization now if you have a foreign llc those businesses formed in another state that wants to do business in delaware the filing fee is 200 the time to process your filing depends on how many submissions the office is working on usually taking 14 business days but you can expedite the process for a 24 hour turnaround the cost is an additional 50 100 for the same day and 500 for a two hour turnaround for one thousand dollars you can even get it processed in an hour for a certified copy of your formation documents you can get it online for fifty dollars but these aren't the only costs in addition you will have a registered agent fee the initial cost is wrapped up in the original certificate of formation but changes will require a form and a 50 fee you can choose to be your own registered agent or hire a delaware registered agent for around a hundred dollars each year now please note that choosing to be your own registered agent does take time and energy and if you are not actually living in the state of delaware it can make things very complicated a name reservation fee if you have your business name and want to reserve it so no one else can use it simply pay 75 to reserve it online or by mail for 120 days fictitious name registration fee if you choose to get a dba registration for your llc you will have to file a form and pay 25 dollars for every county where you want to be registered trademark and service mark application fees to protect your brand's name logo or other intellectual property apply for a trademark for goods or a service mark for services the fee is 35 for a 10-year registration fees for business permits and licenses depending on your business and industry you may need permits or licenses to start you will get an ein or employer identification number from the irs for federal tax reporting and compliance so no matter what type all businesses will need a general business license from the delaware division of revenue for 75 dollars for the first business location each subsequent branches need licenses some industries require professional licenses as well check the delaware.gov website for a list of all required occupational fees now you may be wondering if there are annual llc fees the good news is no delaware doesn't require llcs to file annual reports but there is a 300 minimum annual franchise tax for all registered llcs so let's talk about taxes in addition to federal taxes delaware businesses must pay a minimum annual franchise tax llcs pay a flat 300 annual llc tax a gross receipt tax while there is no state or local sales tax there is a gross receipts tax if you sell taxable goods or services corporate income tax unless your llc is federally taxed as a corporation you won't have the corporate income tax of 8.7 percent llcs in delaware are classified as partnerships or sole proprietorships for deferral tax purposes llc owners must file a personal tax return and pay self-employment taxes and personal income taxes employee taxes if your business has employees on the payroll you need to cover employment taxes like unemployment insurance and state withholding tax so as you can see starting an llc in delaware is pretty affordable you'll pay ninety dollars for your formation seventy five dollars for a business license and three hundred dollars in annual taxes this is all on the low end but you may spend several hundred dollars in your initial filing costs on the high end well that's it for today thank you for watching to find out more about llc's and other business information check our link in the description below and go ahead and like and subscribe we would love to read your comments and answer any questions you may have with that we will see you next time


Thanks for your comment Leroy Bullmore, have a nice day.
- Nedra Mazzarella, Staff Member


Comment by Adan

subscribe to our channel and check out how vpm helps you start and run your remote business total business entities in delaware topped 1.6 million at year end with over 8.72 growth in 2020. it's no wonder delaware is a popular state to form your llc before you begin it's important to know the cost you'll have to fork out before during and after let's go over the four costs you need to know for forming your delaware llc delaware cost number one certificate of formation as an llc in delaware you're required to have a certificate of formation it's like a birth certificate for your llc there's a 90 one-time filing fee it's recommended to do this online to do this online just fill out the form without a cover letter we'll post a quick link in the description box below if you decide to go the mail or fax option check out the link for an example of the cover letter please note there is a 200 filing fee instead of the usual 90 for foreign llcs registering to operate in delaware you can pay 50 to expedite this process the state will approve your delaware llc within one day this will bring your total to 140 after approving your filing the state will send you a stamped copy of your certificate of formation you'll also receive a business identification number you'll use on other paperwork to identify your llc delaware cost number two certificate of good standing banks may also require a certificate of good standing which is a document that states that the llc has paid all the required fees to the secretary state of delaware and has good standing status this cost fifty dollars and you can also request it at the same time as you fill out your certificate of formation online to file by mail you can fill out the pdf we link below for short-term and long-term fees be sure to check out the pdf provided by the state we also linked it below delaware cost number three registered agent with every llc formed it's required to designate a registered agent who will be responsible for receiving service of process and related correspondence from the secretary of state on behalf of the business you could be your own registered agent since it's free but it's not recommended since you'll be exposing your privacy because you'll be using your home address and its public information you can use a business formation service like ink file rocket lawyer and northwest registered agent while the registered agent costs may vary by the package or membership you choose you can expect to pay 119 to 150 a year for the registered agent you'll also want to be cautious with the advertising of first free year of registered agent because you'll get this at the beginning but end up paying lots of money for a registered agent later you could also combine your virtual mailbox and registered agent lucky for you virtual postmail offers free registered agent with every virtual mailbox account you'll get the best of both worlds with a business address from your virtual mailbox and a service to handle the registered agent responsibilities on your behalf because vpm is a virtual mailbox you'll be able to receive same-day notifications through your online account with service of process or other legal correspondences sent to you this ensures you'll never miss a time-sensitive deadline cost number four annual franchise tax so what does your llc cost after it's formed although delaware doesn't have sales tax you'll still have to fulfill various tax requirements as an llc operating in the state one of the reoccurring tax requirements you'll have to pay once your llc is formed is the annual franchise tax this is a fee that certain states including delaware levy against businesses for doing business in the state here are the activities which are treated as doing business in a given state conducting in-person meetings with clients in the state deriving significant portions of the company's revenue from the state having employees work in that state or having to pay state payroll taxes and applying or obtaining a business license in that state for the state of delaware you're required to pay 300 to fulfill the annual franchise tax the payment is due on or before june 1st of each year after your company is formed make sure not to miss the deadline as the state charges the 200 penalty fee plus interest on all late payments you're already off to a great start by choosing to do business in delaware once you have these costs down you're ready to hit the ground running be sure to check out all related videos and articles from our channel and for any questions or things you want to know leave a comment in this video learn more


Thanks Adan your participation is very much appreciated
- Nedra Mazzarella


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