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Do I Need a Lawyer to Set Up a Delaware LLC?

By Matthew Dochnal | Published November 17, 2022

lawyer sitting with a client

If you are a business owner looking to form an LLC, you’ve likely researched some of the legal requirements. Setting up a Delaware LLC on your own can be complicated, and stressing over the details of your legal structure can take focus away from your business plan.

You may be asking yourself whether you need to hire a lawyer to set up your LLC. Having an attorney form an LLC for you can put your mind at ease, however, the cost may not make sense for your business. Using an online incorporation service may be an easier and more economical option.

There are many online incorporation services out there, however, they are not all the same. Incorporation services can differ based on the quality of the internal documents you receive and the level of service you can expect. This typically depends on whether the incorporation service is actually run by attorneys or is just part of some larger corporation.

How do you decide whether to use an online incorporation service or hire a lawyer to set up your Delaware LLC? These are the things you should look for.

Do I Need a Lawyer To Set Up a Delaware LLC?

Hiring an incorporation lawyer with experience forming and maintaining LLCs is a good way to ensure that your company has a strong legal foundation. For many businesses however, hiring a lawyer is not practical or affordable.

How To Set Up an LLC: 5 Steps

The process of forming an LLC in most states can be broken down into 5 steps:

LLC Set-Up Step 1)  Choose a Business Name

You can choose a name for LLC that reflects the type of work your company does, but this is not required. Your company name could just simply be your own name. Note that the company name should end in “LLC”.

It is important to check that your desired LLC name is available before you start spending money to brand your business. IncNow can check if your business name is available in Delaware before you form your LLC.

LLC Set-Up Step 2)  Select a Registered Agent

State laws require LLCs to have a Registered Agent. A Registered Agent receives important legal notices, like lawsuits, on behalf of your company. Often time these legal notices are time sensitive. A Registered Agent must forward these notices to you in a timely manner so that you can respond and avoid any penalties.

The law requires an LLC’s Registered Agent to have a physical mailing address (not a P.O. Box) in the company’s state of formation. The Registered Agent must be available at the address between 9:00 A.M. to 5:00 P.M. Monday through Friday to receive legal notices, also called “Service of Process”.

LLC Set-Up Step 3)  File a Certificate of Formation

Forming an LLC requires filing a Certificate of Formation (also called “Articles of Organization” in some states) with the Secretary of State’s office. The Certificate of Formation lists general information about the company such as the company name address of the Registered Agent. Some states, like Delaware, do not require LLC owners to include their name or address on the formation documents.

LLC Set-Up Step 4)  Prepare an LLC Operating Agreement

The LLC Operating Agreement guides how an LLC’s internal affairs are governed. The Operating Agreement is the internal document that describes the ownership interest of each LLC member and establishes how distributions are made from the company’s profits.

LLC Set-Up Step 5)  Obtain an EIN Number

Obtaining an Employee Identification Number (EIN) from the IRS is an important step in starting an LLC. Banks will require an LLC to have an EIN number in order to open a business bank account.

How Online Incorporation Services Can Help

An online incorporation service will complete the process of forming an LLC for you, often for a fee. This includes filing the Certificate of Formation with the Secretary of State’s office on behalf of your company and serving as the Registered Agent. An incorporation service can also provide you with internal documents that you will need to run your LLC properly. This includes the LLC Operating Agreement.

Using an incorporation service can simplify the LLC formation process. Often these services require you to just fill out an online form with basic information about your company, as well as your contact information. An incorporation service can file your company’s formation documents with just a few clicks without you having to make any contact with the Secretary of State’s office.

 An incorporation service may be able to assist you in obtaining an Employer Identification Number (EIN) for your LLC by filing a Form SS4 with the IRS on your behalf.

 Problems With Online Incorporation Services.

Incorporation services can be like fast food chains. What they’re offering may be similar, however, they can differ in both quality and service.

Some online incorporation services are just “robo-services” that simply take your information, fill out the necessary forms and file them away. Even if a real person completes the initial filing for you, these services may not have incorporation specialists who can answer your important questions. When it comes to forming an LLC, you want an incorporation service that’s big enough to help but small enough to care.

Another problem is that not many online incorporation services are actually run by attorneys. This often impacts the quality of the internal documents they provide you. Many incorporation services use the same LLC Operating Agreement templates that are available online.

An LLC’s Operating Agreement is the heart of a company’s legal structure. If the LLC Operating Agreement does not function properly, the whole business becomes vulnerable to creditors and disputes. An experienced incorporation lawyer can produce an LLC Operating Agreement that provides protection against unforeseen roadblocks you may run into.

Look for an online incorporation service, like IncNow, that is owned and operated by incorporation lawyers. These services can offer attorney quality documents at a filing level price.

NEXT –> Why Should I Incorporate In Delaware?

When deciding where to form your company, consider that Delaware has advantages over your home state that may benefit you. Go