One of the most frequently asked questions entrepreneurs ask is whether to form their business in Delaware or Nevada. Since both offer certain legal and tax advantages, it’s no surprise that over half of all fortune 500 companies are formed there. With that said, you need to take a close look at your business and it’s objectives in order to figure whether to file in DE, NV, or your own home state.
First, learn whether an LLC in general is right for you and then check out the points about DE below:
Pro’s for Delaware
Delaware holds holds quite a few advantages for large businesses or startups planning on raising money from institutional investors, but for smaller companies, it might not be as attractive . Here’s some points to consider:
- Members or managers of an LLC do not need to be Delaware residents.
- When you form an LLC, you can choose whether you want the entity to be taxed as a partnership, S corporation, C corporation or sole proprietorship. Single-member LLC’s pay no taxes– instead the tax liability is passed through to the members.
- There are minimal information requirements to form an LLC and it involves a small filing fee. As an added plus, there are no meetings or voting requirements.
- It’s pretty affordable to maintain a DE LLC. Once a year you fill out a form and pay an annual franchise tax of $300 with the Registered Agent Fee.
- Unlike other states, you are not required to disclose information about the owners of the LLC so there is a pretty good level of privacy, if that matters to you.
Remember that you will need to foreign quality your company in order to transact business in every other state other than your state of incorporation.
So it’s probably a good idea to speak with a lawyer about your foreign qualification costs and any other on going fees with the state where you are transacting business.
To file a Delaware LLC on-demand using experienced business attorneys, feel free to check out.
Best of luck! Feel free to reach out directly if you have any specific questions.