16 Benefits of a Delaware LLC
Forming a Delaware Limited Liability Company (LLC) has numerous benefits that make it a popular choice among business owners. The main reason for forming a Delaware LLC is to protect yourself from future business creditors. The Delaware LLC does this better than an LLC from any other state.
A number of other benefits also make forming a Delaware LLC an attractive option. Chief among them is the flexibility that comes with the freedom to structure the Operating Agreement. Here are the 16 reasons to form a Delaware LLC.
Interested in forming a Delaware LLC? We’ll prepare and file your LLC.
What Is a Delaware LLC?
A Delaware LLC is a Limited Liability Company formed in the State of Delaware. The state where a company is formed governs the internal affairs of the company. Thus, selecting to form a Delaware LLC instead of an LLC in your home state can result in better protections from liability and a better court system to resolve internal disputes between owners and management.
A Delaware Limited Liability Company is a desirable business structure because it protects its Members from personal liability and the business’ creditors. With an LLC, a creditor cannot come after the owner’s personal assets, like their home or savings, the owner’s liability is limited to their investment in the company. LLCs can also “check the box” to be taxed like a sole proprietorship, partnership, s-corporation (if eligible) or c-corporation. Also the Delaware LLC has benefits not found in many states, like the charging order being the exclusive remedy of a personal creditor of a member.
Delaware LLC Benefits
On top of having limited liability protection, there are many benefits of having a Delaware LLC. Among these benefits is better asset protection from creditors, privacy, simple formation process, and access to the world renowned Delaware Court of Chancery.
Benefit #1: Versatility
Delaware LLCs are used for a variety of business purposes. Delaware LLCs offer protection for a wide range of assets, from one-person consulting businesses to multi-million dollar commercial properties. Businesses use LLCs to hold tangible assets, like real estate, and even intangible assets like intellectual property or trademarks.
Benefit #2: Accessibility
Almost anyone (other than individuals from restricted countries) can form a Delaware LLC without having to live in or visit Delaware.
Benefit #3: Operate Anywhere
Delaware LLCs can operate in any state or country. Whether you are doing business in California or India, you can still enjoy the benefits of forming an LLC in Delaware. You do not need a bank account or office in Delaware to form a Delaware. A Delaware LLC just needs to appoint a Delaware Registered Agent to represent the company and comply with state regulations.
Benefit #4: No Restriction on Foreign Owners
Citizens of any country (other than restricted countries) can be owners in a Delaware LLC. Delaware LLCs can easily conduct business internationally.
Benefit #5: Flexible Structure
Delaware LLCs allow business partners to structure their business however they want by signing an LLC Operating Agreement. LLC owners can tailor the rules for how a Delaware LLC is run to meet their specific business needs.
Benefit #6: Low Startup Cost
Delaware has some of the lowest filing fees for LLCs. IncNow’s Delaware LLC packages start at just $0 plus state fees.
Benefit #7: Low Maintenance Fees
Delaware LLCs are only required to pay an annual franchise tax fee of $300 and an annual Registered Agent fee.
Benefit #8: No Delaware Income Tax
A Delaware LLC does not owe Delaware state income tax if it does business in a different state.
Learn more about IncNow‘s top LLC tax tips.
Benefit #9: Asset Protection
Delaware LLCs put up a barrier between personal assets and business liabilities. Business owners are protected from their business creditors. Delaware’s “Charging Order” prevents the creditors of an LLC from taking over the company.
Benefit #10: Quick Turnaround
You can form an LLC in Delaware in days, compared to weeks or even months in some other states.
Benefit #11: Tax Treatment Options
LLC owners have the flexibility to choose how their company is taxed, depending on what works best for their unique situation.
An LLC can be taxed as a sole proprietorship, partnership, S Corporation (if it qualifies), or C Corporation.
This allows business owners to select the tax structure that offers the lowest ineffective tax rate for their company.
Learn more about how Delaware Single-Member LLCs can save on taxes.
Benefit #12: Delaware’s Business Friendly Environment
Delaware has the unique advantage of having a special court system for handling business disputes, this is known as the Court of Chancery.
This court focuses almost exclusively on business law, because of this, its judges are only appointed if they are world renowned experts in technical and practical aspects of wide-ranging business disputes.
With the judges experience and the court’s streamlined process, business disputes in Delaware are typically resolved efficiently and completely, especially compared to all other states.
Benefit #13: Strong Case Law
Delaware has a long history of court decisions involving LLCs and other business entities, creating a well established body of case law to look back on.
This gives business owners and their legal advisors greater confidence and predictability in how courts are likely to rule in future legal proceedings, helping them make informed decisions and reduce legal risk.
Benefit #14: Widely Recognized
Delaware LLCs are highly respected by entrepreneurs and investors.
Forming a Delaware LLC may signal that the company is reputable and well structured.
Benefit #15: Privacy for Owners
Delaware does not require the names or addresses of an LLC’s owners to appear on the state’s public database. A Delaware LLC only needs to include the name and address of its Delaware Registered Agent on the formation document.
Benefit #16: Easily Convert to a Corporation
Delaware LLCs offer flexibility for your future by letting businesses convert into other types of entities, such as corporations, if their needs change or if your company grows.
Why Form a Delaware LLC With IncNow.com
With nearly 50 years of experience, the Incorporation Specialists at IncNow.com (Agents and Corporations, Inc.) can assist you with any questions you may have about forming an LLC in Delaware. But there are many more benefits to incorporating with us:
Reason #1: We’re Affordable
- IncNow‘s Delaware LLC packages start at just $0, plus required state fees.
- First-year Delaware registered agent service is included in the startup cost!
Reason #2: Fastest Turnaround In The Industry
As a Delaware Registered Agent, IncNow has a higher filing priority than agents outside of Delaware and those that file themselves. That means your documents are normally returned to you in one to three days, not weeks.
Reason #3: Unmatched Experience
- We have been filing companies for 50 years.
- Our Incorporation Specialists can help you understand topics such as the common provisions included in Operating Agreements and Certificates of Formation.
Reason #4: We Make It Easy
- It takes five minutes to file your Delaware LLC online.
- You can appoint IncNow as your Delaware Registered Agent, saving time in the process.
- Avoid the often-complicated process of dealing directly with the state.
Reason #5: We’re Reliable
- IncNow has a BBB A+ rating and nearly 1000 reviews on Trustpilot.
Reason #6: We Get Small Businesses
- We’ve been family-owned and Delaware attorney-operated for 50 years. We understand the needs of small businesses because we are one!
Start your Delaware LLC in just five minutes with IncNow.com! We make it fast and easy for you, so you can focus on what’s important: growing your business.