Delaware is famous as the state where most of America’s largest public companies are incorporated, and many founders assume it’s the best place for any new business. For some companies it genuinely is. For most local small businesses it isn’t, because they end up paying fees in two states. This guide explains how to form a Delaware LLC, what it costs after 2026’s tax increase, and how to decide whether it’s right for you.
What a Delaware LLC costs
Table of Contents
| Item | Cost | When |
|---|---|---|
| Certificate of Formation | $110 | At formation |
| Registered agent | Yearly fee if you use a service (usually required for non-residents) | Yearly |
| Annual LLC tax | $400 for the 2026 tax year and later | By June 1 of the following year |
| Annual report | None for LLCs | — |
| Late payment | $200 penalty plus 1.5% interest a month | If paid after June 1 |
The 2026 tax increase, explained
Delaware’s House Bill 400, signed on May 21, 2026, raised the flat annual tax on LLCs, limited partnerships and general partnerships from $300 to $400, retroactive to January 1, 2026. Because Delaware LLC taxes are paid a year in arrears, the tax paid on June 1, 2026 for 2025 was still $300; the first $400 payment is due by June 1, 2027, for the 2026 tax year. Each registered series of a series LLC now owes $100, up from $75.
The same law raised many other Division of Corporations filing and service fees from August 1, 2026, so check the current fee schedule before you file anything beyond the basic formation.
The tax is flat: it’s the same whether your LLC earned millions or nothing, and it isn’t prorated for a partial year. If it stays unpaid for three years, Delaware cancels the LLC’s Certificate of Formation.
Step 1: Choose your LLC name
The name must include "Limited Liability Company", "L.L.C." or "LLC" and be distinguishable from other Delaware entities. Search the Division of Corporations’ entity database, and check federal trademarks, domains and social handles using our business name checklist.
Step 2: Appoint a Delaware registered agent
Every Delaware LLC must have a registered agent with a physical address in Delaware. If you don’t live or have an office there, you’ll need a commercial registered agent, which is an ongoing yearly cost to include in your budget.
Step 3: File the Certificate of Formation
File a Certificate of Formation with the Delaware Division of Corporations and pay $110. Delaware’s certificate is short: it generally requires only the LLC’s name and the registered agent’s name and address. Members and managers don’t have to be named, which is one reason founders value Delaware’s privacy.
Standard processing can take a couple of weeks; Delaware offers expedited options, at a range of extra fees, down to same-day or faster.
Step 4: Write an LLC agreement
Delaware requires an LLC agreement (its term for an operating agreement), which can be written or oral. Put it in writing. Delaware law gives members wide freedom to design their own rules on management, profits, transfers and duties, which is part of its appeal for more complex businesses. That flexibility makes a carefully drafted agreement especially important.
Step 5: Get an EIN and open a bank account
Apply for a free EIN from the IRS. Opening a US business bank account can be harder for non-residents and remote founders, so check a bank’s requirements before you form. See choosing a business bank account.
Step 6: Register where you actually do business
This is the step that changes the economics. If your LLC does business in another state, for example because you live, work, hire or have an office there, it generally must register as a foreign LLC in that state. That means a second filing fee, a second registered agent and that state’s annual reports and taxes, on top of Delaware’s $400 a year.
If your business operates in Delaware itself, you’ll also need a Delaware business license and may owe Delaware’s gross receipts tax. Delaware has no sales tax.
Step 7: Pay the annual tax by June 1
Delaware LLCs don’t file an annual report. Instead, pay the annual LLC tax by June 1 each year for the previous year, through the Division of Corporations’ website. Late payment brings a $200 penalty plus 1.5% monthly interest on the tax and penalty.
How a Delaware LLC is taxed
Delaware doesn’t tax LLC income when the business operates outside the state. Federally, a Delaware LLC is taxed like any other: as a sole proprietorship, partnership or, by election, a corporation. You’ll still pay income tax in the state where you live and where the business earns income.
When a Delaware LLC makes sense
- You’re raising venture capital or plan to. Investors and their lawyers are familiar with Delaware law, though many venture-backed startups use a Delaware corporation rather than an LLC.
- You have complex ownership: several investors, classes of members, or detailed rules on management and transfers.
- You value a well-developed body of business law, including Delaware’s specialized business court, the Court of Chancery.
- You want the LLC’s members kept off the formation record.
- You’re building a holding structure with several entities, where consistent Delaware law across all of them simplifies agreements and management.
When it usually doesn’t
- A local business with one location, such as a contractor, salon, café, cleaner or consultant serving local clients. You’ll pay Delaware’s tax plus your home state’s fees and taxes, with little practical benefit.
- You’re forming to avoid your home state’s taxes. It generally doesn’t work: states tax business done within their borders regardless of where the LLC was formed.
Example: Delaware versus your home state
For an owner who lives and works in, say, Georgia:
| Georgia LLC only | Delaware LLC registered in Georgia | |
|---|---|---|
| Formation | About $110 | $110 in Delaware plus Georgia foreign registration |
| Yearly state costs | About $60 | $400 Delaware tax plus Georgia annual registration |
| Registered agents | Optional (can self-serve) | Delaware agent required, plus a Georgia agent |
For most small, local businesses, forming at home is simpler and cheaper.
Delaware for founders outside the United States
Delaware is one of the most common choices for international founders selling to US customers. Before forming, plan for:
- A US registered agent with a Delaware address, and usually a mailing or virtual address service.
- An EIN. Founders without a US Social Security number can still obtain an EIN, but the process takes longer than the instant online application.
- Banking. Many US banks require an in-person visit or US-based documentation; some online banks and payment providers accept non-resident founders. Confirm requirements first.
- US tax filings. Foreign-owned single-member LLCs have specific IRS reporting obligations even when no US tax is owed, and penalties for missing them can be significant.
- Beneficial ownership reporting. FinCEN’s 2026 rule exempted US-formed companies, but foreign companies registered to do business in the US still report. Confirm current rules when you form.
An accountant who works with international founders is worth consulting before you choose between Delaware, Wyoming and other states.
Your Delaware LLC compliance calendar
| Deadline | Filing | Paid to |
|---|---|---|
| June 1 each year | Annual LLC tax ($400 from the 2026 tax year) | Delaware Division of Corporations |
| Yearly | Registered agent renewal | Your agent |
| Your home state’s dates | Foreign LLC annual reports and taxes | Home state |
| If doing business in Delaware | Business license renewal and gross receipts tax returns | Delaware Division of Revenue |
Frequently asked questions
Does a Delaware LLC file an annual report? No. LLCs pay the annual tax instead.
When is my first annual tax due? By June 1 of the year after your LLC is formed.
Can I be my own Delaware registered agent? Only if you have a physical Delaware address and are available there during business hours. Most out-of-state owners use a commercial registered agent, and the cost varies widely between providers.
What changed on August 1, 2026? House Bill 400 raised a range of Division of Corporations filing and service fees from that date, separate from the annual tax increase. Check the current fee schedule before filing amendments, certificates or expedited requests.
Can a non-US resident form a Delaware LLC? Yes. Non-residents commonly form in Delaware or Wyoming, but should plan for US tax filings, banking requirements and a registered agent.
Next steps
Compare with our Wyoming LLC guide, read the Start a Business A–Z guide, and see how to incorporate a business.
This guide is general information, not legal or tax advice. Fees and rules change; check the Delaware Division of Corporations before you file.
Sources
- Withum, Delaware businesses face increased annual taxes and filing costs (House Bill 400)
- InCorp, Delaware business filing fee increase (August 1, 2026)
- BusinessAnywhere, Delaware LLC cost (October 2026)
- Delaware Division of Corporations
Last reviewed October 18, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
Leave a Reply