Permanent residents of the United States are able to start businesses and form LLCs in Delaware. This includes US green card holders. In fact, individuals from almost any country in the world (except restricted countries) can form a Delaware LLC.
If you are a permanent resident looking for your piece of the American Dream, forming an LLC for your business is an important first step. Forming a Delaware LLC is simple, however, noncitizens will have to make some additional considerations when forming.
How To Form a Delaware LLC As a Green Card Holder.
Green card holders have the same rights and privileges as US citizens when it comes to starting and operating businesses in the United States. The process to set up a Delaware LLC is no different for a green card holder than for a US citizen.
Here are the steps to form a Delaware LLC:
Step 1. Choose the Company Name
Your company name can simply be your name, or it can be a more typical name that reflects the work that you do. Note that the company name must end in “LLC”.
The name of your LLC cannot conflict with the name of an existing company. IncNow can check if your LLC name is available in Delaware before forming the entity.
Step 2. Select a Delaware Registered Agent
A Delaware Registered Agent is a person or company that receives important legal notices on your LLC’s behalf. This includes Service of Process documents, such as lawsuits or subpoenas. A Registered Agent needs to forward legal notices to you in a timely manner so that your company does not get hit with penalties or default judgments.
The vast majority of people who form Delaware LLCs do not live in Delaware. The State requires those residing outside of Delaware to hire a Registered Agent located in Delaware to represent the LLC. IncNow can serve as your Delaware Registered Agent for a small fee.
Step. 3 File a Certificate of Formation
The Certificate of Formation is the official document that brings your LLC to life. The Certificate is filed with the Delaware Secretary of State’s Division of Corporations and becomes part of the public record.
Unlike other states, Delaware only requires the name of the company and the address of the Registered Agent to appear on the Certificate of Formation.
Step 4. Create an LLC Operating Agreement
The LLC Operating Agreement is the internal company document that details how your LLC is structured. The Operating Agreement should list who the LLC members are and their ownership interest. It should also include procedures for making changes to the LLC structure, such as adding new members.
Can an LLC Have Foreign Members?
Delaware LLCs are able to have foreign members. In this context, “foreign” refers to foreign nationals residing outside of the United States.
The ownership structure of a Delaware LLC can include domestic and foreign individuals, foreign investors, and even domestic or foreign companies as members.
People Who Cannot Form A Delaware LLC.
Certain individuals are not able to form US business entities, like Delaware LLCs. This is typically because these individuals are nationals or residents of countries sanctioned by the United States government.
The US Department of Treasury’s Office of Foreign Asset Controls (OFAC) is tasked with enforcing restrictions that prevent US persons from doing business with specific countries.
Some restricted countries include:
- North Korea
OFAC also maintains the Specially Designated National and Blocked Persons List (“SDN List”). The SDN List includes the names of approximately 6,300 companies, organizations and individuals who are restricted from doing business with US entities.
OFAC typically places individuals on the SDN List due to having ties to groups or organizations identified as posing a threat to US national security.
Companies providing Delaware registered agent services are not allowed to do business with individuals or business entities included on the SDN List. If a registered agent service finds out that they represent a company connected to a restricted individual, they must resign as the company’s registered agent. The state will administratively cancel the company if a new registered agent is not appointed within 30 days.
Do I Need an ITIN or an EIN If I Have a Green Card?
Foreign entrepreneurs often ask whether they need to obtain an ITIN if they have an EIN for their company. You may use an ITIN instead of an EIN where an EIN is requested, however, not the other way around. An EIN cannot replace an ITIN where an ITIN is required.
The Individual Tax Identification Number, or ITIN, is an IRS tax ID number that allows individuals who are unable to obtain a Social Security Number to pay taxes for income received in the United States. An Employer Identification Number, or EIN, is the type of tax ID number assigned to businesses entities, including LLCs.