How long will it take to incorporate my Delaware LLC and have it be open for business?
Chances are you have researched the term Delaware LLC and you are almost ready to incorporate a State of Delaware LLC. Yet you are anxious to get started and want to choose an incorporator to start your Delaware LLC quickly and be a reliable Registered Agent in Delaware. The question you have is how long will it take and what other steps are required. Relax. It is easier and faster than you thought.
We have all seen our birth certificate. It is used to apply for passports, driver’s licenses and other legal documents. Likewise the “birth certificate” for your Delaware LLC shows the time your Delaware LLC was born. Your liability shield will go up the moment the Delaware LLC is filed. Unlike your children, your Delaware LLC need not wait 18 years to enter into contracts. Your Delaware LLC can enter into contracts from the moment your Delaware LLC is born. Your Delaware LLC is also a legal “person” according to the law, just not a “natural” person. On your birth certificate is a date and time of delivery. Likewise, on your Certificate of Formation for your Delaware LLC, the State of Delaware Secretary of State’s Division of Corporations stamps the date and time your Delaware LLC is filed. However, just like getting a copy of your birth certificate, you do not get a copy of the certificate of birth instantaneously, the minute a baby is born. Instead, the process of “approving” the Certificate is an administrative process that can take hours, days or weeks, depending upon which filing priority is assigned to your Delaware LLC and the backlog or volume of filings the Secretary of State receives that that day. In the end of December, when everyone is trying to form Delaware LLCs before the end of the year, these time frames can be longer in addition to other unexpected issues. December is the most hectic time and a time when you should consider paying extra for faster filing priorities.
A Certificate of Formation (a.k.a “Articles of Organization” in a number of other states) is processed by a skilled team of experts at the Delaware Division of Corporations. The Delaware Secretary of State’s Division of Corporations’ office processes about 10 times as many certificates per day as most other states. Although your Delaware LLC is legal as of the moment of filing, it is not usually a good idea to start doing business with your Delaware LLC until you receive back the Certificate of Formation from our office. The reason is because sometimes the Certificate can be put in suspense or rejected by the Delaware Division of Corporations. This can be because of (1) a name conflict with another active company, (2) the use of an objectionable name, or (3) because the minimum filing criteria have not been met, such as the document not being executed or missing required information.
At IncNow, our business process is to receive your Delaware LLC order online, charge your credit card, call you if there is a problem. If there is not a problem, which there usually is not, we will then enter the name of your company into the Delaware Corporation Imaging System (a.k.a DCIS). The moment we hit enter on this entry, creates the filing date and time. We then create a cover memo, draft your Delaware LLC Certificate of Formation and sign your Certificate of Formation as the authorized person (a.k.a “Organizer”). Then we scan and upload the image of your LLC’s cover sheet and Certificate of Formation into the DCIS system. On the cover sheet we list a filing priority. As a Delaware agent, our routine filings get assigned to “priority 6” which under normal work volumes with the state of Delaware comes back in 1-2 business days. If you were to draft and submit the Certificate of Formation yourself, it would be assigned “Priority 7” which is a slower processing time, usually 1-2 weeks under normal workflow volumes with the Delaware Secretary of State’s Division of Corporations. When forming your Delaware Limited Liability Company, it is legal as of the minute we initially file it with the Delaware Secretary of State’s Division of Corporations DCIS database.
After filing with as your Registered Agent, you can expect the “stamped filed copy” of your Delaware LLC Certificate of Formation and our cover letter and your proposed documents mailed to you via Priority Mail. Your Delaware LLC Operating Agreement will also be delivered to you usually within 4-6 business days after you order it from us, in the United States. Ordering an email copy will typically reduce this delivery time to 2-3 business days.
As an important aside, we highly recommend the Delaware LLC Operating Agreement because it is like a prenuptial or partnership agreement that helps avoid partnership problems if someone leaves the business, dies or tries to transfer an interest away. The LLC membership interest transfer is governed by this Delaware LLC Operating Agreement. We say the only ship that does not float is a partnership. It’s usually not a question of whether a business will fail, but when. For that reason it’s important to be prepared ahead of time when the sailing is smooth. Additionally every Delaware LLC must have an Operating Agreement, whether it is on a napkin, in an email or verbal. Of course, the best LLC Agreements are Delaware LLC Operating Agreements that are carefully drafted for all scenarios. It is best not to have to argue over what the agreement was later. Paper is cheap and lawsuits are expensive. (Hint: It is also a very good idea to sign the LLC agreement. The LLC agreement does not need to be notarized, or filed or even returned to our office. It is for the members’ records (owners). It is best to keep a scanned copy of the signed agreement in case you lose the original.) The members can also be the managers or you can name a third-party manager. Our agreement is set-up to be either member managed or manager managed (where members also retain a right to management). Delaware is not like some states which require one or the other. In Delaware your LLC can be both member managed and manager managed. This provides for maximum flexibility.
If you are outside the United States, global priority mail takes longer depending where you live. If you request the email option you usually receive it in 2-3 days no matter where you are in the world. And if this isn’t quick enough, you can request expediting options, such as 24 hour filing priority. This speeds up the turn around by the Delaware Secretary of State’s Division of Corporations significantly. Should you have an extremely urgent matter, Delaware also has same-day service, 2 hour service, 1 hour service and ½ hour service. To order these extremely urgent filings, please call our office to ensure we are aware of your proposed Delaware LLC filing and we can have the stamped filed copy of your Delaware LLC to you within a much faster time frame, often the same day. These services are not available online. We have many other “off menu items” we offer such as these higher filing priorities for the fastest Delaware LLC available.
Once you have the “evidence of filing” of your Delaware LLC which is an image of the Certificate of Formation with the time and date stamp and a unique 7-digit ID number, then you will know with certainty when your Delaware LLC was legally formed and that the name and Certificate have been accepted and put on public record with the State of Delaware. At that time everyone in the world will be on “record notice” that your LLC has been legally formed, just like a birth certificate. Unlike a birth certificate the Delaware LLC’s Certificate of Formation does not list the names of the members and managers. Your Delaware LLC only lists the name and address of the registered agent (Agents and Corporations, Inc., the legal name for IncNow) and the name of the authorized person, in addition to the 7-digit ID number and the time and date it was filed. Should you want to list your name as the initial member or manager, you should make a special request at the time of formation. As your Delaware Commercial Registered Agent (a.k.a. Delaware Resident Agent or Delaware Registered Agency) we are required to keep a contact name, address and phone number on file, which is available for official investigations and to respond to subpoenas. We also use this contact name and address to forward service of process to you if your Delaware LLC is sued and forward Delaware annual report notices. It is important to note that our office is not a mail forwarding address for business purposes. Should you require a Delaware mail forwarding address, we can provide a referral to Stat Office Solutions, just one floor up from us in our building.
While you can obtain a Certified Copy of the Delaware LLC’s Certificate of Formation from the State of Delaware after the Delaware LLC is formed, you cannot obtain a “wet-ink” original of the Delaware LLC’s Certificate of Formation, because that is not filed with Delaware, since only images are filed. If you order the Certified Copy, your Delaware LLC’s Certificate of Formation will have a cover memo signed by the Secretary of State with a special notation on the bottom for the recipient to confirm the validity of that Certified Copy by checking the http://www.corp.delaware.gov. The same also holds true of a “Certificate of Good Standing” (a.k.a Certificate of Status). Both the Certified Copy and Certificate of Good Standing can be obtained for $99 either at the time of formation of any time after the formation.
At that point it is up to you to obtain a Tax ID number (a.k.a. Employer Identification Number or EIN) and whatever other business licenses are required where you are located. A bank will require an EIN number to open an account in the United States. We would also be glad to obtain a tax ID for you for $99 if you have a US Social Security Number or $199 if you do not have a US Social Security Number.
You should also check with any other states outside Delaware where you have an office or employees to determine if you should also file a Certificate of Authority to do business from that state. That is a process known as “Qualification” and IncNow would be glad to assist you with that if needed. That is also referred to as a “Foreign LLC” because your LLC will always remain a State of Delaware based LLC (a.k.a. Delaware Domestic LLC). That means the internal affairs will be governed under Delaware case law, the Delaware LLC Act and you will also have access to Delaware’s Court of Chancery for internal business disputes, number one rated, by the US Chamber of Commerce for eight years running. This is a primary reason to set up an LLC in business friendly Delaware. There are also a host of other reasons, but that is outside the scope of this article.
The business licenses for your Delaware LLC can be obtained from businesslicenses.com or you can obtain them yourself. You can also contact your local bank to see if any other information is required to open your LLC in your home state. Sometimes people prefer to use a Delaware bank for their Delaware LLC and we can provide a referral. Then you can contact this bank to see if they can assist you, such as Wells Fargo or HSBC. We do not open bank accounts for Delaware LLCs because of federal “know your customer” laws and the Patriot Act.
This is the process of forming your LLC and getting ready to do business. It’s actually a relatively simple process and IncNow’s incorporation specialists are available to assist you by telephone from our Delaware headquarters should you have questions. We look forward to helping you with the LLC formation process. We help about 10-20 people every day with this process and would welcome the opportunity to assist you and serve as your new Delaware LLC’s registered agent. We are A-plus certified by the Better Business Bureau and stand by our 40 years in business as a Delaware attorney operated service.
Our attorneys are active in this area of the law. For example our President, John Williams, conducts national teleconferences through the American Bar Association and National Business Institute to attorneys about aspects of the Delaware LLC and was recently named Vice Chair of the American Bar Associations’ Real Property Trust and Estate Section’s Committee on Partnerships and Limited Liability Companies. David Williams, the Vice-President and Founder is AV certified by the Martindale-Hubbell law directory (highest certification available) and was the first tax-lawyer in Delaware. The Williams Law Firm, P.A. is general counsel to IncNow and provides confidence to people who incorporate in Delaware and choose IncNow.com. The Williams Law Firm, P.A. is not your attorney. Should you need a Delaware attorney to answer issues of Delaware law, such as assistance in further customizing or understanding your LLC agreement, they would need to be retained separately on an hourly basis. Disclaimer: They do not answer questions of securities law, tax law or international law. Usually the minimum retainer for this service is $1000. The Williams Law Firm, if retained, does not offer any privacy or secrecy for you, just Delaware law counsel.
