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LLC in Delaware
Do it yourself (free ֍AI-powered Guide)
Welcome!👏👏 to the AI-powered, DIY Guide for Forming an LLC in Delaware!🚀🏢 Follow our Step-by-Step Instructions to Easily Create Your LLC, Obtain a Tax ID Number (EIN), and Open a Business Bank Account. Start your entrepreneurial journey today with our comprehensive and user-friendly LLC formation process.
This step-by-step guide will walk you through the process, covering essential aspects such as creating the LLC , obtaining a Tax ID Number (EIN), and opening a business bank account.
This guide was created using AI technology, specifically the large language model Bard and the chatbot GPT-3. Bard is a factual language model from Google AI, trained on a massive dataset of text and code. GPT-3 is a large language model chatbot developed by OpenAI.
Disclaimer:
The information in this guide is for educational and informational purposes only and should not be considered legal or tax advice. It is essential to consult with a qualified attorney before making any decisions based on the guide. While we strive for accuracy, we disclaim liability for errors or omissions. By using this guide, you acknowledge its limitations, and the Company and its employees, owners, or contributors are not liable for any consequences resulting from not seeking professional advice.
Table of Content:
1. Choose a Name for Your LLC
2. Appoint a Registered Agent
3. USA Mailing Address
4. File Articles of Organization
5. Confirmation of Filing
6. LLC Operating Agreement
7. Obtain Tax ID Number (EIN)
8. Open a Business Bank Account
Step 1: Choose a Name for Your LLC
Select a unique and distinguishable name for your LLC that complies with Delaware's naming requirements. The name should include the words "Limited Liability Company," "LLC," or an acceptable abbreviation.
Ensure that the name you choose is not already in use by another business entity in the state.
You can search the Delaware Division of Corporations to check the availability of your desired LLC name.
When choosing an LLC name, consider the following:
• Availability: Check Delaware's business name database for uniqueness.
• Legal Requirements: Comply with Delaware laws, use appropriate designators.
• Restricted Terms: Watch for restrictions on terms like "bank" or "university."
• Avoid Misleading Names: Ensure the name doesn't imply false activities.
• Trademark Check: Search for conflicts using the USPTO database.
You may want to consult with a business advisor to ensure compliance and to address any specific concerns related to your chosen name.
Appoint a Registered Agent
Designate a registered agent who will receive legal and official documents on behalf of your LLC in Delaware. A registered agent is an individual or business entity designated to receive legal and official documents on behalf of your LLC. This includes important mail, such as tax forms, legal notices, and service of process (lawsuits).
The registered agent must have a physical address in the state and be available during business hours.
The cost of a registered agent for 12 months varies depending on the service provider and the state in which your LLC is formed. Typically, the cost ranges from \$125 to \$200 per year.
Ways to find a registered agent
Search online: There are many websites that list registered agents in your state. You can search by location, price, and other factors.
Contact the Secretary of State: The Secretary of State may have a list of registered agents that you can contact.
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Step 3: USA Mailing Address
When forming an LLC, you are required to provide:
1. Registered agent address - where legal and official documents will be served to your LLC, and
2. Mailing address (business address) - The mailing / business address is the location where your LLC conducts its operations and receive all other mail items.
The business address can be a physical address or a mailing address, such as a P.O. Box or a virtual office address.
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Step 4: File Articles of Organization
Prepare and file the Articles of Organization with the Delaware Secretary of State. Your Articles of Organization are the legal documents that create your LLC. The articles require the following information:
STATE OF DELAWARE
CERTIFICATE OF FORMATION
OF
LIMITED LIABILITY COMPANY
1. The name of the limited liability company.
2. The registered agent's name and address.
3. Execution Block - The document must be signed by an authorized person of the limited liability company.
Note: This form contains information required by statute; if you need to add additional information permitted by statute you may draft a new document.
Filing Fee
The filing fee for the Articles of Organization is $90. A certified copy may be requested for an additional $50.
This fee may be subject to change, so it's important to verify the current fee at the time of your LLC formation.
You can submit the filing fee along with the completed Articles of Organization form to the Delaware Secretary of State.
Confirmation of Filing
After you file the Articles of Organization for your LLC, several things typically occur:
1. Confirmation of Filing: Once you have filed your Articles of Organization, you will receive a confirmation email with your LLC's filing number. You can use this filing number to track the status of your filing.
2. Certificate of Organization: Once your Articles of Organization are processed, and the filing is approved, you will receive a stamped and approved copy of your filed documents.
Your LLC is created.
1. Legal Recognition: With the filing of the Articles of Organization and receipt of the Certificate of Organization, your LLC becomes legally recognized as a separate business entity.
2. Limited Liability Protection: As a result of forming an LLC, the primary benefit is limited liability protection. This means that the owners/members of the LLC are not personally liable for the company's debts.
3. Taxation: By default, a single-member LLC is considered a disregarded entity for tax purposes, meaning the LLC's income and expenses are reported on the owner's personal tax return. if the LLC has multiple members, it is treated as a partnership. Alternatively, you can elect to have your LLC taxed as a corporation by filing Form 8832 with the IRS.
Step 6: LLC Operating Agreement
An LLC Operating Agreement is a legal document that outlines the ownership structure, management, and operational guidelines of a limited liability company (LLC).
While not required by law in many states, having an Operating Agreement is highly recommended for several reasons:
1. Clarifies ownership, capital contributions, profit distribution, and member roles.
2. Establishes decision-making procedures and governance rules.
3. Preserves limited liability protection by separating personal and business assets.
Preparing an operating agreement for your LLC
1. Research State Requirements: Review the specific requirements and guidelines for operating agreements.
2. Outline Key Sections: Identify the sections you want to include in your operating agreement. Some common sections are:
• Introduction: Include the LLC's name, purpose, and principal place of business.
• Ownership: Percentage ownership of each member, and how new members can be admitted.
• Management: Describe how the LLC will be managed, whether by members (member-managed) or designated managers (manager-managed). /...
• Voting Rights: Outline voting rights and decision-making processes for major company decisions.
• Profit Distribution: Determine how profits and losses will be allocated among the members.
• Capital Contributions: Specify the initial and ongoing financial contributions of the members.
• Dissolution: Address the process for dissolving the LLC if needed.
• Dispute Resolution: Include provisions for resolving disputes among members.
• Amendments: Outline the process for amending or updating the operating agreement.
3. Draft the Operating Agreement: Using the information gathered, and the sections identified above.
4. Review and Finalize: Once finalized, ensure that all members of the LLC review and agree to the operating agreement.
5. Execution: Each member should sign the operating agreement to acknowledge their acceptance of its terms.
Remember, While it's possible to prepare an LLC operating agreement by yourself, it is generally recommended to seek professional legal assistance.
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