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State Formation Guide · Verified June 2026

How to Start an LLC in Delaware (2026 Guide)

Delaware is the prestige choice — home to the famous Court of Chancery and roughly 68% of Fortune 500 companies. It's $110 to form and a flat $300 a year to maintain, with strong legal protections and member privacy. It's the default for startups raising venture capital. This guide walks all 8 steps — with a cost calculator and the one catch most guides skip.

Ahmad Adil Written & verified by Ahmad Adil, LLC School·Updated June 2026
Quick Answer

To start a Delaware LLC, file a Certificate of Formation for $110 with the Delaware Division of Corporations, name a Delaware registered agent, and create an operating agreement. Each year you pay a flat $300 franchise tax (due June 1) — there's no annual report for LLCs. Delaware has no sales tax, doesn't tax out-of-state income, and keeps member names off the public filing.

Delaware LLC — Fast Facts
Filing fee
$110
Franchise tax
$300/yr
Annual report (LLC)
None
Sales tax
None
Out-of-state income tax
None
Members public?
No
File via
corp.delaware.gov

Why Form an LLC in Delaware?

Delaware has been the corporate capital of America for more than a century. Its appeal isn't low cost — it's law. Decades of court decisions, a dedicated business court, and the most flexible entity statutes in the country make Delaware the default for companies that need legal certainty and outside investment. Here's what draws people:

  • The Court of Chancery — a 230-year-old business court with expert judges (no juries) and the deepest body of corporate case law anywhere.
  • Investors expect it — venture capitalists and institutional investors strongly prefer (often require) Delaware entities, making it the standard for fundraising startups.
  • No tax on out-of-state income — Delaware doesn't tax income earned outside the state, and there's no state sales tax.
  • Privacy — members and managers aren't named on the public Certificate of Formation.
  • Open to non-residents — no residency or citizenship requirement to form.

It's no accident that roughly 68% of Fortune 500 companies and the overwhelming majority of venture-backed startups are Delaware entities. If your future includes raising money or sophisticated contracts, Delaware is the well-worn path.

The catch most guides skipIf you live and run your business in another state, forming in Delaware usually means you'll also register as a foreign LLC in your home state — paying that state's fees and taxes too — on top of Delaware's $300/year franchise tax and registered-agent fee. Delaware truly shines when you're raising venture capital, want the Court of Chancery behind your contracts, or run a holding company. For a typical freelancer, local shop, or small online business, forming in your home state — or in Wyoming for cheaper privacy — is often simpler and less expensive.

Delaware LLC Cost Calculator

Delaware's costs are predictable. Toggle the options to see your one-time formation cost and your ongoing annual cost:

Delaware LLC Cost Calculator
One-time formation + recurring annual
Certificate of Formation RequiredOne-time state filing fee$110
Annual franchise tax RequiredFlat fee, due June 1 every year$300/yr
Registered agent serviceRequired in DE — most owners use a commercial agent$125/yr
Delaware business licenseOnly if you actually do business in Delaware$75/yr
Expedited processingOptional — next-business-day turnaround$50
Name reservationOptional — holds your name for 120 days$75
One-time to form
$110
paid once
Per year after
$425
ongoing

Estimates only. "One-time to form" is your formation cost; "per year" combines the franchise tax and registered agent (plus the business license if you operate in Delaware). Your first $300 franchise tax is due June 1 of the year after you form. Delaware LLCs file no annual report. The $75 business license and gross receipts tax apply only if you conduct business in Delaware. Registered agent pricing varies by provider. Not legal or tax advice.

Delaware LLC formation paperwork with the Delaware state flag and the Wilmington skyline in the background

The 8 Steps to Start Your Delaware LLC

Here's the full path from name to taxes. Each step has its own detailed guide with a tool to make it easier:

1Name Your LLCPick a compliant, available name and check it with the Division of Corporations.Step 1 → 2Registered AgentAppoint a Delaware agent with a physical in-state address.Step 2 → 3Certificate of FormationFile the $110 form that creates your LLC.Step 3 → 4Operating AgreementSet ownership and management rules (recommended).Step 4 → 5Get an EINYour free federal tax ID from the IRS.Step 5 → 6Franchise TaxPay the flat $300 tax by June 1 each year.Step 6 → 7Business LicensesOnly if you do business in Delaware ($75 + gross receipts).Step 7 → 8LLC TaxesPass-through; Delaware doesn't tax out-of-state income.Step 8 →

The Court of Chancery Advantage

The single biggest reason sophisticated companies choose Delaware is the Court of Chancery — a specialized business court that has heard corporate disputes since 1792. Cases are decided by expert judges rather than juries, and the result is a vast, predictable body of case law that lawyers and investors can rely on. When a venture firm wires money into a startup, they want the certainty that Delaware's framework provides. That predictability — not a tax break — is what Delaware is really selling.

No sales tax — but a gross receipts taxDelaware is one of the few states with no sales tax. In its place, it charges a gross receipts tax on businesses that sell goods or services within Delaware. If your LLC doesn't actually operate in Delaware, this generally won't apply to you — it's aimed at in-state business activity, not the legal home of your entity.

Ahmad Adil's Take: Delaware earns its reputation — but for the right person. If you're building a startup you intend to raise venture money into, form in Delaware; investors will expect it, and it saves a painful conversion later. If you want the Court of Chancery standing behind your contracts, nothing else compares. But if you're a freelancer, a small online shop, or a local service business with no plans to raise capital, Delaware's $300-a-year franchise tax plus a registered agent plus foreign registration in your home state is usually more cost and paperwork than it's worth. Match the state to your actual plans — prestige you don't need isn't worth paying for. For pure low-cost privacy, look at Wyoming instead.
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Frequently Asked Questions

Delaware LLC — FAQ

How much does it cost to start a Delaware LLC?
It's $110 to file the Certificate of Formation. After that, expect a flat $300 franchise tax each year plus a registered agent (around $125/yr) — so roughly $425 a year to maintain. A $75 Delaware business license applies only if you actually do business in Delaware.
Does a Delaware LLC file an annual report?
No. Delaware LLCs don't file an annual report — only corporations do. LLCs simply pay the flat $300 franchise tax by June 1 each year. Late payment triggers a $200 penalty plus 1.5% monthly interest.
Is Delaware good for a small or online business?
It depends. Delaware is excellent for venture-backed startups and companies that value the Court of Chancery. But for a small or solo business rooted in another state, forming in Delaware usually means dual fees and foreign registration at home. In that case your home state — or Wyoming for low-cost privacy — is often the better choice.
Does Delaware have sales tax?
No. Delaware has no state sales tax. Instead it imposes a gross receipts tax on businesses selling goods or services within Delaware. If your LLC doesn't operate in Delaware, this generally doesn't apply.
Do I need a Delaware business license?
Only if you actually conduct business in Delaware — operations, sales, or income generated in the state. The license is $75/year from the Division of Revenue. Many Delaware LLCs formed by out-of-state owners don't operate in Delaware and don't need one.
Can a non-resident form a Delaware LLC?
Yes. There's no residency or citizenship requirement to form a Delaware LLC. You'll need a Delaware registered agent with a physical in-state address, and you can get a free EIN from the IRS even without a U.S. Social Security Number.
Why do so many companies incorporate in Delaware?
Mainly the Court of Chancery and Delaware's deep, predictable body of business law, plus investor familiarity. Roughly 68% of Fortune 500 companies and most venture-backed startups are Delaware entities, which makes it the path of least resistance for fundraising and complex deals.
Ahmad Adil, founder of LLC School
About the Author
Ahmad Adil

Ahmad Adil is the founder and CEO of LLC School. The figures in this guide — the $110 Certificate of Formation fee, the flat $300 franchise tax due June 1, the no-annual-report rule for LLCs, the no-sales-tax/gross-receipts structure, and the business-license-only-if-operating-in-Delaware nuance — were verified against the Delaware Division of Corporations and Division of Revenue. LLC School updates its Delaware guides as the rules change.

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