Delaware LLC Costs – Summary

Fee/Cost	Amount
Certificate of Formation (LLC filing fee)	$90
Trade Name (DBA, optional)	$25 – $75
Business Name Reservation (optional)	$75
State Business License (seller’s permit)	$75
Local Business Licenses (e.g. building permit, alarm permit)	$10 – $100
Other State Licenses (e.g. liquor license, child care license)	$50 – $1,000
Commercial Registered Agent Service (optional)	$199 – $400
Operating Agreement Assistance (optional)	$100 – $1,000
Annual Franchise Tax	$300

Starting a limited liability company in Delaware comes with substantial costs, and you’ll likely end up paying several fees as you go through the required steps. Before you file a certificate of formation to register an LLC in Delaware, make sure you fully understand the expenses involved.

The LLC related costs may include both one-time and ongoing fees, and you’ll want to know about all of them so that you can plan ahead responsibly. You could sort through the various steps and their associated fees on your own. Or, you can use an LLC formation service to register your LLC which will know what expenses to budget for and how to handle the process of getting your Delaware LLC officially established.

There are affordable and reputable LLC formation services available. Should you prefer to complete the steps yourself, here’s a guide to the various filing fees and ancillary expenses that you should be prepared to pay.

General Steps and Costs When Forming a Delaware LLC

Naming your Delaware LLC

Your Delaware LLC needs a name that’s different from all of the business names currently being used in Delaware.

You can easily check if a name is in use by conducting a free search on the Department of State’s Division of Corporations name reservation search. You’ll need to perform a separate search for each business entity listed on the drop-down menu (e.g. LLC, LLP, or corporation).

Although there’s no fee for using the name reservation search, you’ll have to pay if you want to reserve a name and/or register a trade name (DBA):

• A business name reservation costs $75. When you run the name reservation search, you’ll see an option to reserve the desired name and pay a $75 fee.
• A trade name (DBA) costs $25 for each county where your business will use the name. Most companies pay $25 for each county where they have a physical presence, for a maximum of $75 (New Castle, Kent and Sussex counties). Submit the Registration of Trade, Business & Fictitious Name Certificate to the clerk of the peace (county clerk) of each county where you need the trade name.

Estimated Costs for Naming Your Delaware LLC: $0 – $150

Filing a certificate of formation

In Delaware, you officially establish your LLC by filing a Certificate of Formation of a Limited Liability Company. Forming an LLC in Delaware costs $90; you’ll pay this amount when you file the Certificate of Formation.

If you’re establishing a foreign LLC that is based in an out-of-state location, the form is a Certificate of Registration and the fee is $200.

Estimated Cost for Filing the Certificate of Formation: $90

Appointing a registered agent

Each Delaware business is required to have a registered agent. Your agent must have a physical address in Delaware and needs to be available for official mailings. This person will also receive service of process should your LLC ever be named in a lawsuit.

You can serve as your LLC’s registered agent, or you can appoint another adult in the state. Alternatively, you may hire a commercial registered agent service. Hiring a registered agent service can improve legal compliance, privacy and convenience.

Should you choose to hire a registered agent service, expect to pay $199 to $400 for most services. You’ll avoid this cost if you serve as the agent.

Estimated Costs for a Registered Agent: $0 – $400

Creating an operating agreement

Delaware doesn’t require an LLC to have an operating agreement in place, but creating one is highly recommended. An operating agreement details ownership structure, management responsibilities, operations, and other major items. It also helps determine what transpires if there’s a death, disagreement or other fundamental issue.

You can draft an operating agreement yourself at no cost, but seriously consider getting help with it. You don’t want to find a fundamental flaw in your agreement when there’s a major issue to resolve.

If you decide to get help drafting an operating agreement, an operating agreement service or business lawyer can help. Lawyer fees are almost always higher than the cost of using a service.

Estimated Costs for an Operating Agreement: $0 – $1,000

Estimated filing fees and expenses for your Delaware LLC

Once these estimates are tabulated, you’ll probably spend anywhere from $90 to $1,640 by the time your LLC is officially established in Delaware. How you decide to handle a registered agent and an operating agreement will have the largest impact on what you ultimately pay. Being able to quickly file forms might help you avoid some costs, such as the name reservation fee.

One way to get assistance while keeping costs relatively low is to use an LLC formation service. An LLC formation service that includes a registered agent and an operating agreement may be available for less than $1,000 (possibly much less).

Other Annual and Additional Delaware LLC Costs

In addition to the aforementioned filing fees and costs that all business owners must consider, there are some other expenses to be aware of. Your LLC will have to pay certain annual fees, and you may face additional costs depending on your specific business.

Of course, you’ll have an ongoing registered agent cost if you use a registered agent service. When the service’s fee comes due each year, you can reconsider whether this expense continues to make sense.

Franchise tax

All LLCs in Delaware must pay an annual franchise tax of $300. It grants them the privilege to continue operating in the state. You can file and pay online through Delaware One Stop.

The franchise tax is due by June 1 of each year, and steep penalties apply if you don’t file on time. Missing the deadline results in a $200 penalty plus 1.5 percent monthly interest on the amount due.

Estimated Costs for Franchise Tax: $300

Business licenses & permits

Most businesses in Delaware must obtain a Delaware business license, and your LLC might need additional local, state or federal licenses/permits. They grant a business the right to conduct certain operations. Licenses and permits can be required for everything from furnace repair to nuclear reactor management.

If you need any federal licenses (which is less common), the associated costs will be the same regardless of where you locate your business.

Common Delaware & local licenses/permits

The required Delaware business license serves as a seller’s permit. It allows companies to collect and remit state taxes, such as sales tax. The fee for the Delaware business license is $75. You can apply for it through Delaware One Stop (preferable) or by filing Form CRA.

Businesses in certain industries (e.g. alcohol sales, child care, and automotive services) might need additional state licenses. These licenses can cost as much as $1,000 (e.g. for a liquor license), but most have fees in the lower hundreds. Contact the appropriate state agency for your business’ industry to find out whether your LLC is subject to any other state licensing requirements.

Your company may also need local licenses and/or permits. Check with the local municipal clerk and clerk of peace (county clerk) to find out if you need them. The clerk can tell you how much a license or permit costs. The fee is usually less than $100 and possibly under $25.

Licenses may have one-time or ongoing costs. Permits might only need to be purchased once, or they may have to be bought separately for different projects.

Estimated Costs for Licenses/Permits: $75 – $1,000+

Annual report

Delaware is one of the few states that have no annual reporting requirement for LLCs. Unlike most states, it doesn’t expect you to pay an annual report fee. However, your LLC is subject to a franchise tax that other states don’t always have.

Estimated Costs for Annual Report: $0

LLC fee

The only annual fee that LLCs pay in Delaware is the franchise tax of $300. There are no additional annual fees, and the franchise tax is a flat fee regardless of revenues or profits.

Estimated Costs for Annual LLC Fee: $0 (not including the franchise tax)

What Expenses You Can Write Off

On a positive note, these expenses help reduce your tax burden. Most of the fees and other costs associated with filing your LLC are legitimate business expenses. They can be claimed as tax deductions, so long as they’re solely and directly intended for your LLC.

The following LLC filing fees and annual costs generally qualify as write-offs:

• Certificate of formation fee
• Name reservation fee
• Trade name (DBA) fee
• Franchise tax fee
• License and permit fees
• Registered agent costs
• Operating agreement costs
• Lawyer expenses

These aren’t all the costs that might qualify as business tax deductions. Talk with a qualified tax professional to review your situation and find out what expenses you can claim when filing a tax return.

Conclusion

These costs aren’t cheap, but don’t let them deter you from becoming a business owner. Budget for the fees and costs that you’ll have to pay, and proceed with the steps for starting your LLC in Delaware. The potential for success is likely far greater than the cost of these fees.

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