In short, yes it is easy to incorporate as a limited liability company (LLC) in Delaware. The actual filing and setting up an LLC is such a small part of the actual incorporation process though. There are things that need to be done both before and after establishing an LLC. I’ll break them down accordingly:
Before forming an LLC
- Every startup should analyze what business entity is most appropriate for them. Your choice in which corporate structure you go with will shape the amount of taxes you pay and the paperwork you have to deal with. Moreover, the entity you choose can really affect your ability to seek funding from venture capitalists (VCs). VCs typically stay away from LLCs. Thus,it’s a pretty important decision and one that should be carefully considered.
- Equally as important – which state should I incorporate in? If you’re forming an LLC, is it worth setting it up in Delaware? That will be dependent upon facts particular to your business.
After forming an LLC
- Don’t forget about any publication requirements for your state.
- Did you draft a complete operating agreement? Legally required in some states, it is a set of documents that provide the company a framework for various business and functional issues that may arise. It’s not recommended to simply take some sample that you find from searching online. Rather, it should be tailored to meet your startup’s unique qualities and needs.
- The need for a co-founder agreement (if applicable). The document will outline the purpose of the company. This statement should be carefully constructed: broad enough not to be too restrictive, but specific enough to be meaningful. You and your partners can change it later, but it’s best to give this agreement ample attention in the beginning.
- Annual state reports are sometimes required to be filed with a certain fee and you have to lay out who your “members” are and what percentage each one owns in the company.
- Are you complying with the rules regarding member meetings? Failure to abide by statutory requirements gives courts a reason to “pierce the LLC veil,” thereby exposing you to personal liability.
Anyways, if you’re looking for affordable price quotes to have an experienced group of startup attorneys incorporate your business then check out. Our legal platform uses technology to make our legal services more cost-effective and accessible than traditional law firms. Good luck with your company!