Delaware is one of the leading states to form an LLC or Limited Liability Company. Approximately 63% of Fortune 500 companies are coordinated in Delaware and more than 50% of all U.S. publicly-traded organizations. It has an abstract filing process to help you speed up your LLC quickly and has an eminence for being a business-friendly state. Aside from that, Delaware has low filing fees and franchise taxes to attract businesses.
Here, we will discuss the Delaware LLC cost and why it is the best state to create your next business.
Six Reasons to Start a Business in Delaware Now
Delaware LLCs have privacy protection. They are not obliged to list member names and addresses in their filings. The only specified in the LLC’s operating agreement are the managers and members. Hence, the ownership and management information is not registered and available as written in public records.
LLCs in Delaware protect the assets of an owner. Many startups have created an LLC structure to protect their assets from lawsuits. Besides, Delaware is one of several states requiring a charging order as the sole remedy for debt collection on single LLC members.
Delaware does not include tax in companies that operate outside its borders. It means you won’t end up paying Delaware state taxes if you don’t have a physical office or business directly within the state.
Business Friendly Laws
Delaware has a well-established and respected Court of Chancery dedicated to resolving corporate disputes. It is a non-trial court that focuses on businesses and reviews commercial litigation and real estate issues. It consists only of judges and no jurors. Also, it provides business issues to be resolved quickly by a judge who specializes in corporate law and has expertise in settling complex corporate disputes.
Cheaper Filing Fees
Filing fees are cheaper in Delaware but not the most affordable than in other states. The Delaware LLC cost in filing the Certificate of Formation is only $90, and the annual franchise tax is $300. Furthermore, it does not need to register any yearly reports. The corporation filing fees are more complicated and are based on your authorized stock shares and assume par value.
If you want to raise capital for your business, establishing it in Delaware is a great option. Those new companies seem to attract outside investment funds from angels, venture capitalists, and private equity firms. Investors are more likely to regard investing in your company because of the Delaware-friendly business. Furthermore, top investors and business leaders know the Delaware system, and Venture Capitalists and investment banks frequently prefer Delaware corporations.
If you are thinking of funding a venture or going public, it is better to integrate with Delaware from the start rather than convert the company into a domestic entity later. The Delaware LLC cost may be higher, but it saves long-term costs. In general, by merging with the state of Delaware, you will be exposed to a better range of investment options.