General legal information, published for everyone. It does not apply the law to anyone’s particular situation and is not legal advice. Laws change and differ by place; check the primary sources below.
Quick summary
- A Delaware LLC exists once a certificate of formation is filed with the Division of Corporations (6 Del. C. § 18-201).
- Every Delaware LLC must keep a registered office and registered agent in Delaware.
- The LLC agreement (operating agreement) governs most of how the company runs, and Delaware gives it wide freedom of contract.
- Delaware LLCs pay a flat annual tax, due June 1, and file no annual report.
- An LLC formed in Delaware that operates in another state usually must also register there as a foreign LLC.
What it means
An LLC is a business entity that combines limited liability for its owners (called members) with flexible management and tax treatment. Delaware is a common choice because its LLC statute emphasizes freedom of contract, and because its Court of Chancery has a large body of decisions interpreting business entity law.
Forming in Delaware does not by itself change where a business must comply with local law. A company that has employees, an office, or other substantial activity in another state is generally subject to that state's registration, tax, and employment rules too.
Key terms
- Certificate of formation
- The short public document filed with the Delaware Secretary of State that creates the LLC. It must state the LLC's name and its registered office and agent.
- LLC agreement (operating agreement)
- The members' agreement governing ownership, management, voting, distributions, transfers, and dissolution. Under Delaware law it can be written, oral, or implied.
- Registered agent
- A person or company with a Delaware address designated to receive legal process and official notices for the LLC.
- Member-managed / manager-managed
- Whether the members run the LLC directly or appoint one or more managers to do so.
- Foreign qualification
- Registering an LLC formed in one state to do business in another state.
- Series LLC
- A Delaware LLC that establishes separate series, each with its own assets and members, under 6 Del. C. § 18-215.
How the law works
Formation
Formation is governed by the Delaware Limited Liability Company Act, Title 6, Chapter 18 of the Delaware Code. The certificate of formation is filed with the Division of Corporations and must set out the LLC's name and the address of its registered office and the name and address of its registered agent (§ 18-201). The name must include "Limited Liability Company," "L.L.C.," or "LLC" and be distinguishable from other entities on the state's records (§ 18-102). Filing fees are set by the Division of Corporations and change from time to time; the current schedule is published on the Division's website.
The LLC agreement
The Act states a policy to give maximum effect to the principle of freedom of contract and the enforceability of LLC agreements (§ 18-1101(b)). Members can define management structure, voting rights, capital contributions, profit and loss allocations, distributions, restrictions on transferring interests, and procedures for adding members or dissolving. Delaware also allows an LLC agreement to restrict or eliminate fiduciary duties, though not the implied contractual covenant of good faith and fair dealing (§ 18-1101(c)). Where the agreement is silent, the Act's default rules apply.
Limited liability
A member or manager is not personally obligated for the LLC's debts, obligations, or liabilities solely because of being a member or manager (§ 18-303). Limited liability does not protect a person from liability for their own wrongful acts, from obligations they personally guarantee, or, in some circumstances, from claims that the entity's separateness should be disregarded ("piercing the veil").
Ongoing requirements
- Annual tax. Delaware LLCs pay a flat annual tax, due on or before June 1 each year (§ 18-1107). The amount is set by statute; Delaware's Division of Corporations lists the current figure and late penalties.
- No annual report. Unlike Delaware corporations, Delaware LLCs do not file an annual franchise tax report.
- Registered agent. The LLC must maintain a registered agent in Delaware at all times (§ 18-104).
- Good standing. Failing to pay the tax or maintain an agent can lead to loss of good standing and, eventually, cancellation of the certificate of formation.
Tax classification and federal filings
For federal income tax, an LLC with one member is by default disregarded as separate from its owner, and an LLC with two or more members is by default taxed as a partnership. An LLC can elect to be taxed as a corporation (IRS Form 8832) and, if eligible, as an S corporation (Form 2553). Most LLCs obtain an Employer Identification Number from the IRS. In March 2025, FinCEN issued an interim final rule removing beneficial ownership reporting requirements for companies created in the United States; confirm current requirements on FinCEN's website.
Operating in other states
An LLC formed in Delaware that "transacts business" in another state is generally required to register there as a foreign LLC, appoint a registered agent in that state, and pay that state's fees and taxes. What counts as transacting business is defined by each state's statute.
Examples
Hypothetical example
Two founders with unequal contributions
Two founders form a Delaware LLC. One contributes most of the capital; the other will run the business full time. Their LLC agreement can allocate profits, voting, and management differently from ownership percentages, because Delaware law gives effect to those terms as written.
Hypothetical example
A Delaware LLC with an office in Texas
A company formed as a Delaware LLC opens an office and hires staff in Austin. In addition to its Delaware obligations, it would typically register as a foreign LLC with the Texas Secretary of State and become subject to Texas tax and employment rules.
Common questions
Does the operating agreement have to be filed with the state?
No. The certificate of formation is filed publicly; the LLC agreement is a private document among the members.
Do Delaware LLCs have to hold annual meetings?
The Act does not require annual meetings. Meeting and voting requirements, if any, come from the LLC agreement.
Does a Delaware LLC have to have a Delaware address?
It must have a registered office and registered agent in Delaware. Its business operations and principal office can be anywhere.
Where are disputes about Delaware LLCs decided?
Disputes about the internal affairs of a Delaware LLC are often heard in the Delaware Court of Chancery, and many LLC agreements choose that court. The Act gives the Court of Chancery jurisdiction over several kinds of LLC matters, such as interpreting LLC agreements and removing managers.
Important distinctions
LLC vs. corporation
Corporations have a statutory structure of shareholders, directors, and officers and file an annual franchise tax report in Delaware. LLCs are governed mainly by their agreement and pay a flat annual tax. Investors in venture-backed companies commonly prefer corporations.
Forming in Delaware vs. registering in Delaware
Forming creates the entity under Delaware law. Registering as a foreign LLC lets an entity formed elsewhere do business in a state. A business that operates only in its home state often forms there instead to avoid paying two states.
Primary sources
- Statute6 Del. C. ch. 18Delaware Limited Liability Company ActDelaware
- Statute6 Del. C. § 18-201Certificate of formationDelaware
- Statute6 Del. C. § 18-102Name requirementsDelaware
- Statute6 Del. C. § 18-104Registered office and registered agentDelaware
- Statute6 Del. C. § 18-303Liability to third parties of members and managersDelaware
- Statute6 Del. C. § 18-1101Construction and application; freedom of contractDelaware
- Statute6 Del. C. § 18-1107Taxation of limited liability companiesDelaware
- Agency guidanceDelaware Division of Corporations — LLC/LP/GP annual taxesDelawareCurrent annual tax amount, due date, and penalties.
- Agency guidanceIRS — Limited liability company (LLC)United States (federal)Default tax classification and elections.
- Agency guidanceFinCEN — Beneficial ownership informationUnited States (federal)Current status of beneficial ownership reporting.
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- Last updated
- Oct 8, 2026
- Jurisdiction
- Delaware
- Written by
- House Legal editorial (AI-assisted)