The United States of America is the only country in the world that everyone knows. The USA has a super economy and bypasses China in terms of indicators. Any businessman dreams of opening a company in the United States and entering the world market. Opening an LLC in Delaware is advisable for investors who want to provide high-class protection to their business at fairly low taxation.
Why should you open an LLC in Delaware?
The Delaware Secretary of State publishes a business report annually that highlights new registrants.
Research shows that the state continues to maintain its status as the leading jurisdiction for new businesses, especially in the form of LLCs. In general, more than 1.5 million companies and corporations operate in the state, which significantly exceeds its population (almost 974 thousand people).
But most of all businessmen are interested in how to register an LLC in Delaware. After all, it is this organizational and legal form that is the leader in terms of the number of newly created persons – 73%. The popularity of the registration of Delaware LLCs can be explained quite simply:
- almost complete freedom of management structure, ownership, work, and administration of the company, depending on the tasks;
- no structural formalities. Here it is not necessary to hold meetings of the board of directors, keep minutes and draw up decisions, as well as observe other similar bureaucratic procedures;
- The Delaware LLC structure provides for pass-through taxation.
The absence of most of the obstacles, red tape, and formalities faced by corporations allows business people to use companies registered in Delaware to manage both a small private business and an investment fund or a complex operating corporation.
As for doing business in the form of corporations. Only 20% of new legal entities were created in this form in 2019. Typically, corporations in Delaware are created to raise capital from the sale of shares or to go public.
The 2019 Annual Report confirms the dominance of the state as the most attractive place to register public legal entities. 67.8% of Fortune 500 companies decided to open an LLC company in Delaware. It is also preferred by people planning an IPO. More than 89% of all legal entities that made an initial public offering in 2019 were Delaware corporations (in particular: Uber, Pinterest, Slack Technologies).
Opening company in Delaware: Stages
It is easier to register an LLC in Delaware than in most US states. The simplicity and availability of the procedure is another factor that attracts international investors to the staff.
Conventionally, the procedure for creating an LLC in Delaware can be divided into the following stages:
- Prepare an operating agreement, and a certificate of registration, and check the company name for uniqueness.
- Submit documents in person, send them by mail or send them through the website of the Corporate Department. The latter is the fastest way to set up a company in Delaware.
- The registration certificate must contain the following information: name + LLC suffix, name of the registered agent and his/her address in Delaware, LLC activity period (can be created for an unlimited period), date, and signature. You can also indicate in the text any additional information if it is necessary to create an LLC.
- Pay registration fee: 90 USD – standard procedure, 140 USD – expedited procedure.
- Conclude an operating agreement (it can also exist orally). This document contains information on the structure of the Delaware company, all rights, and obligations of the participants. Its presence makes it easier to open a bank account and conduct business.
- Obtaining a tax number (EIN). Its presence is necessary if you plan to use employees, taxation in the form of an S corporation, or a business license. Issued free of charge on the state tax office website.
- Open a bank account. To do this, you will need a copy of the registration certificate, operating agreement, and EIN.
- Obtain a business license. It is needed if you plan to register a company in Delaware and conduct business in the state. A business license is issued online on the website of the Department of Revenue. Estimated cost – $ 75.
- Pay a flat deductible tax ($ 300) annually. Payment is made online through the Delaware Corporate Department website.
