7 Benefits of Forming a Delaware LLC
There are many factors to consider when forming a new company, such as the location of the business, where the business will be conducted, what services will be offered, and who will run it. These factors feed into determining what type of entity to incorporate and where.
When determining what state to incorporate in, and what type of entity to choose (Corporation vs. Limited Liability Company), keep the following considerations in mind.
- No Restrictions on the Types of Owners. Forming a Delaware LLC only requires a minimum of one member. A company only needs two or more members if that LLC wants to be taxed as a partnership.
- Flexible Member and Manager Liability. Members and managers can outline the type of liability they can face for the LLC’s debts and obligations. This shields any member or manager from personal liability and protects their personal assets.
- Cheaper Filing Fees. Delaware tends to have cheaper filing fees in comparison to places such as New York. For example, Delaware’s filing feel is only $90 for its certificate of formation, including a municipality fee, while New York’s filing fee for articles of organization is $200.
- No Annual Filing Requirement. Not only is it cheaper to file in Delaware, it also sometimes requires less work. While places like New York are required to file Biannual reports, Delaware is not required to file an annual report.
- No Publication Requirement. Also, unlike New York, Delaware does not have a publication requirement. Places like New York require new LLC’s to provide notice of its formation in two newspapers in the New York county where its office is located for six weeks in a row. This can sometimes cost around $2,000. Afterwards, New York LLCs additionally have to file proof of this publication, which costs $50 to file such a certificate of publication with affidavits.
- Series LLCs May Be Organized. Series LLCs allow for a more customizable entity experience. Different divisions or units can be created containing different LLC interests with its own separate rights and powers regarding specific obligations. This allows for more control.
- No Contribution Requirement. Members can be admitted to a Delaware LLC without being forced to make a contribution to the entity.
Source: WestLaw
Author Bio: Amy Weiss
Amy Weiss is a Summer Associate for Besnoy Law P.C., where she conducts legal research on the evolution of privacy laws including FERPA, CCPA, GDPR, and HIPAA. Her passion for ad tech and privacy came while working in broadcast, print, and digital media organizations. As a digital marketing strategist for a media buying agency, Amy developed best practices for protecting personal information when creating targeted ad campaigns using platforms such as Facebook and Google. Amy is currently a rising 2L at the Benjamin N. Cardozo School of Law and is on the executive board for the Intellectual Property Law Society as its IT/Software Chair. She is also a Staff Editor on the Cardozo Arts and Entertainment Law Journal.