Frequently Asked Questions about Delaware company formation

The most popular forms are Delaware Limited Liability Company and Delaware Corporation. 

LLC have more flexible tax structures, low maintenance cost, a flat annual tax, minimal information requirements, simple and secure incorporation process. 

Corporations, on the other hand, are more prestigious, have opportunity to raise capital through investors, transferable ownership through stock. 

Setting up a Delaware LLC can be a good cost-effective solution. There is no statutory minimum share capital required to incorporate a Delaware company. LLCs do not need to obtain business licenses. Further, LLCs are exempt from the annual financial statement / audited accounts requirement. Members and directors of LLCs are not required to reside in Delaware. Companies established by the foreigners can avoid U.S. taxation if the company has a non-U.S. income source.

It is not necessary to be an American citizen to form and operate a Delaware company. Anyone except for residents of restricted countries can form a Delaware company and operate lawful business activities from anywhere in the world.

A Delaware company can be incorporated remotely and we can assist you with the set up process so you don't have to visit Delaware. 

No, it is not necessary to reside or even do business in Delaware. However, a company must have a registered agent with an address within the state.

A registered agent acts as an intermediary and ensures the liaison between the company and the state. Registered agents is responsible for receiving and forwarding legal documents and correspondence from the Delaware governmental institutions to clients in a timely fashion. 

There is no statutory minimum share capital required to incorporate a Delaware company. 

Delaware LLC can select one of the four taxation models. Typically LLC is taxed as a partnership unless selected otherwise. LLC is not itself federally taxed on its profits and losses but its items of gain or loss are “passed through” to the LLC’s members (owners) to be claimed on their individual income tax returns. 

A Delaware LLC that is not physically doing its business in the State is only required to pay annual flat fee of $300. This franchise tax is due annually on June 1. 

Franchise Tax is the fee imposed by the State of Delaware for the right or privilege to own a Delaware company. The tax has no bearing on income or company activity; it is simply required by the State of Delaware to maintain the good standing status of your company.

The term "Franchise Tax" does not imply that your company is a franchise business. All companies pay a Delaware Franchise Tax, regardless of their business income, business model or company structure. (copied)

Only the company name and the name and address of the Registered Agent typically appear on the Certificate of Formation, along with the date of filing and the company file number.

Operating Agreement is an internal document typically used to memorialise the understanding and agreements between the members in the event of a future dispute or misunderstanding. 

Entities can not be corporate Directors or Delaware LLC. Only natural persons can be Directors.