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The Delaware LLC is the most adaptable business entity type that any state or country in the world offers. Delaware LLC formation has various advantages that might apply in various LLC scenarios.
Privacy - Companies must appoint a registered agent who maintains the official address, receive mail, and gather paperwork, just like when a business is registered in most states. However, unlike most states, Delaware only requires that the name of the registered agent be made public when it comes to the company. Officers, directors and shareholders are not required to disclose their names, which allows an extra degree of anonymity. And due to this lack of reporting, they are also exempt from maintaining residency in Delaware.
Tax benefits - Companies that are registered in Delaware but do not operate their businesses in the state are not required to pay corporate income tax. Delaware does not impose a personal property tax, an inheritance tax, a sales tax, or taxes on investment income. You have to pay a franchise tax to register a company in Delaware, but these fees are minimal compared to the income taxes.
Corporation Court - Corporate lawsuits in Delaware are resolved by the Court of Chancery, a court made up of judges who specialise in corporate law. Delaware has established and predictable legal precedents, which may be beneficial to companies. The average civil lawsuit may take years to be resolved, but since Delaware uses judges rather than juries and gives corporate-related cases priority, similar cases can be resolved more quickly.
Asset Protection - Increased asset protection from creditors is another advantage of a Delaware LLC. This means that a creditor cannot attack an LLC or seize any of the LLC's assets if a member of the LLC has a judgement filed against him or her. Everyone in the company is protected by this benefit.
Easy formation process - Company filings can be done on the same day in Delaware. Frequently, the incorporation process can be finished within one hour. Delaware law makes it even easier by allowing only one person to hold multiple positions within the company, such as officer, director, and shareholder. In other states, this is only possible with sole proprietorships or LLCs.
In comparison to many other states, Delaware makes registering a business entity incredibly simple. Here is a step-by-step instruction for registering a new business or submitting paperwork.
Also read: Can I open a US business bank account from abroad?
- Choose your company name
Your company name must contain the words "association," "company," "corporation," "club," "foundation," "fund," "incorporated," "institute," "society," "union," "syndicate," or "limited," and it must be unique and not similar to the name of another company.
- Choose a business entity type
Select your business entity type: limited partnership, statutory trust, C corporation, S corporation, or limited liability company (LLC).
- Appoint a registered agent
Every Delaware corporation is required to have an in-state "agent for service of process." This can be either a person or a company that can accept legal documents on the company's behalf if it is sued.
- Submit a certificate of incorporation
After submitting a Certificate of Incorporation to the Delaware Secretary of State, your company will become a legal entity.
- Get an EIN
Every US business needs an EIN (Employee Identification Number). You must use your EIN on all business-related documents. You need to get an EIN from your company formation agent.
