How to start an LLC in Delaware

Delaware is the default home for startups that raise money: it costs $110 to file, keeps owner names off the public record, and settles business disputes in the specialized Court of Chancery that investors trust. The catch is a flat $400 annual franchise tax — and if you actually operate from another state, you’ll likely end up paying Delaware and your home state. This guide covers the real costs, the filing steps, and when Delaware is the wrong call.

What a Delaware LLC really costs

The required cost to form is the $110 Certificate of Formation filing fee, paid to the Delaware Division of Corporations. That’s it to get the LLC created — the fee schedule lists optional add-ons (a certified copy, a certificate of good standing, expedited processing), but most founders skip them on day one.

Certificate of Formation fee

$110

Required, once

Annual franchise tax

$400

Flat, every June 1

Registered agent (if hired)

$50–$300

Per year

EIN from the IRS

Free

Once, after approval

The recurring cost is the one people underestimate — a flat $400 franchise tax every year, starting the year after you form. Here’s the five-year picture in state fees alone, assuming you file on time:

A registered agent — required if you don’t have a Delaware address yourself — typically runs $50–$300/year on top of that. Want the full picture across states? The LLC cost by state guide and the Wyoming vs. Delaware comparison put Delaware’s numbers next to the alternatives.

How to form a Delaware LLC, step by step

1. 1

   Choose your LLC name

   Your name must include a designator like “LLC” or “Limited Liability Company” and be distinguishable from every entity already on the Division of Corporations’ records. Check availability on the Division of Corporations before you commit to branding.

   Delaware also lets you reserve a name for 120 days for a small fee if you’re not ready to file yet. Most founders skip the reservation and just file the Certificate of Formation directly — that locks the name in immediately.

2. 2

   Appoint a Delaware registered agent

   Every Delaware LLC must continuously maintain a registered agent with a physical Delaware street address to accept legal mail and service of process. This is the one requirement most out-of-state founders can’t satisfy themselves, so almost everyone hires a commercial registered agent, typically $50–$300 a year. It’s also part of how Delaware protects your privacy: the agent’s address goes on the public record, not yours.

3. 3

   File the Certificate of Formation

   The Certificate of Formation is the document that creates your LLC — Delaware’s equivalent of Articles of Organization. It’s short: your LLC name and the name and address of your registered agent. Notably, it does not list the members or managers, which is why Delaware ownership stays off the public record.

   File it with the Division of Corporations for the $110 fee. Standard processing takes roughly 2–3 weeks (about 10 business days of state processing plus return mail); Delaware offers same-day and even one-hour expedited service for additional fees if you’re in a hurry — a common need when a financing is closing.

4. 4

   Get your free EIN from the IRS

   An EIN (Employer Identification Number) is your LLC’s federal tax ID. You’ll need it to open a business bank account, hire, and file taxes. It’s free directly from the IRS — apply online once your LLC is approved. Never pay a third party a standalone fee just to “get you an EIN.”

5. 5

   Create an operating agreement

   Delaware doesn’t legally require an operating agreement, but for a Delaware LLC it matters more than almost anywhere else. Delaware law gives extraordinary weight to the freedom of contract — the operating agreement is the document that actually governs the company, and Delaware courts will enforce what it says. It sets out ownership, voting, economics, and manager authority; banks and investors will ask to see it. If you’re forming in Delaware for investor reasons, a well-drafted operating agreement is not optional in practice.

6. 6

   Check the federal BOI rules

   New U.S. LLCs briefly had to file a Beneficial Ownership Information (BOI) report with FinCEN. That changed in March 2025: under FinCEN’s interim final rule, entities formed in the United States are exempt from BOI reporting — only companies formed under foreign law that register to do business in the U.S. still file. A new Delaware LLC generally has nothing to file with FinCEN today, but the rules have shifted before, so give them a quick check when you form.

A realistic formation timeline

Need it faster? Delaware’s same-day and one-hour expedite options exist for exactly this — closings and financings rarely wait three weeks.

The franchise tax: Delaware’s $400 (and the trap if you miss it)

Every Delaware LLC owes a flat $400 annual franchise tax, due June 1, starting the year after formation. Delaware charged a flat $300 for years; under HB 400, signed May 21, 2026, that rose to $400 effective for the 2026 tax year. Unlike a Delaware corporation’s franchise tax, an LLC’s tax doesn’t scale with shares or assets — and there’s no annual report to file alongside it. You just pay the $400 by the deadline.

Why founders and VCs pick Delaware

Delaware’s appeal isn’t about saving money — it’s about predictability and credibility. Three things drive it:

• The Court of Chancery. Delaware runs a separate, business-only court with judges (no juries) and more than a century of written case law on corporate and LLC disputes. When something goes wrong between partners or investors, outcomes are relatively predictable — and predictability is exactly what money wants before it commits.
• Investor familiarity. The entire venture ecosystem — term sheets, SAFEs, board consents, option-pool math — is written assuming a Delaware entity. A Delaware company is the path of least resistance for a VC’s lawyers, and raising a priced round often means being (or converting to) a Delaware entity anyway.
• Privacy. Delaware keeps member and manager names off the public formation record. For founders who don’t want their home address and ownership searchable, that matters.

When Delaware is not worth it

Here’s the part the incorporation ads skip. Delaware only helps if you’re either raising outside capital or genuinely need its legal system. For most people forming a small business, Delaware costs more and delivers nothing extra.

The reason is foreign qualification. Your LLC is “domestic” only in the state where it’s formed. If you form in Delaware but actually operate somewhere else — you live there, your office or employees are there, you’re doing ongoing business there — that other state requires you to register your Delaware LLC as a foreign LLC and pay its fees. Now you’re running two registrations for one business:

You pay twice — two annual fees, two registered agents — and your business is still taxed where you actually earn the money, because Delaware doesn’t tax income from business done outside the state. The “Delaware advantage” gets eaten by the second set of fees. For an out-of-state operator with no investors, forming at home is almost always simpler and cheaper.

Bottom line: form in Delaware if you’re raising money or genuinely need the Court of Chancery. Otherwise, form where you operate. If you’re location-independent and just want low fees and privacy without the franchise tax, Wyoming is usually the better pick — and if you’re still deciding the whole question, start with the best state to form an LLC.

Delaware LLC taxes, briefly

• No state sales tax. Delaware is one of a handful of states with no sales tax at all.
• The franchise tax is a flat fee, not an income tax. The $400 is owed regardless of whether you made a dollar — it’s the price of keeping the LLC in good standing.
• Pass-through by default. A default-taxed Delaware LLC doesn’t pay Delaware income tax on profits earned outside the state; the income flows to the owners, who pay federal tax and income tax where they live and operate.
• Gross receipts tax applies to business actually conducted within Delaware — most out-of-state owners never touch it.

Where FilingDesk fits

FilingDesk’s Delaware filing is available now. Describe your business in plain English, and we run the name check, prepare and file your Certificate of Formation with the state — every filing reviewed and submitted by a human before it goes out — then get your EIN and generate your operating agreement, with a Delaware registered agent included free for your first year. One flat $99 plus the $110 state fee, $209 all-in for Year 1 ($99/yr after), everything included, no upsells. There’s a 60-day money-back guarantee, and — worth saying plainly — if you operate from another state, we’ll tell you when Delaware isn’t the cheaper choice rather than sell you a filing you don’t need.

Ready? Form your Delaware LLC now.

Frequently asked questions

Sources

• Delaware Division of Corporations — How to Form a New Business Entity
• Delaware Division of Corporations — LLC/LP annual franchise tax
• Delaware Division of Corporations — Fee schedule (UCC & entity fees)
• Delaware General Assembly — House Bill 400 (raises LLC annual tax to $400)

This guide is general information, not legal advice. FilingDesk is not a law firm.