How to start an LLC in Delaware

Amount

$400 per LLC per year. HB 400 raised it from $300, effective January 1, 2026. Each registered series of a series LLC adds $100.

When it is due

On or before June 1, covering the previous calendar year. Form in 2026 and your first $400 is due June 1, 2027. Form in 2027 and it is due June 1, 2028.

No proration

The tax applies to any year the LLC is active on the state record, even for a day. An LLC formed on December 15 owes the full $400 for that year. If the date doesn't matter to you, forming in early January buys almost a full extra year before the first payment.

How you hear about it

Delaware mails the annual tax statement to your registered agent, not to you, at least 60 days before June 1. Your agent is supposed to forward it. Set your own reminder anyway.

How to pay

Online through the Division of Corporations tax payment page, by Visa, Mastercard, American Express, Discover, or ACH, available daily from 8:00 AM to 11:45 PM Eastern. There is no report to fill in.

If you pay late

A $200 penalty is added, then 1.5% interest a month on the tax and penalty together. Two months late, $400 becomes about $618.

Loss of good standing

An LLC with unpaid tax stops being in good standing. You can't get a Certificate of Good Standing for a bank or lender, the Division won't accept most filings, and the LLC can't bring a lawsuit in a Delaware court until it pays. Members don't become personally liable just because the tax is unpaid.

Cancellation

If the tax goes unpaid for 3 years from its due date, the Certificate of Formation is canceled. Reviving the LLC costs $220 plus every year of unpaid tax, penalties, and interest.

Closing the LLC

To close a Delaware LLC, you pay the full annual tax for the year of closing before the $220 Certificate of Cancellation is accepted. Closing in March still costs the full $400 for that year.

Delaware warns about mailers and emails that look official and ask for "annual report" or tax payments. LLCs don't file an annual report in Delaware at all, so any notice charging you for one is not from the state. Only pay on the Division of Corporations site or through your registered agent.

What Delaware charges you

$110 to form, then $400 every year, whether or not the business does anything in Delaware.

What your home state still charges

A foreign LLC registration fee and that state's annual report or tax. In New Jersey that's $100 to register and $75 a year, the same as forming a New Jersey LLC directly.

Registered agent

Mandatory, and you can't do it yourself unless you're a Delaware resident or the LLC has a Delaware office. Commercial agents typically renew around $125 to $149 a year with the services we track. You'll usually need an agent in your home state too, which you can often be yourself.

Taxes

Your profit is taxed where you live and work. Delaware's lack of sales tax and its income tax rates don't apply to a business run from another state.

Example: a New Jersey freelancer

A New Jersey LLC costs $100 to form and $75 a year. A Delaware LLC run from New Jersey costs $110 plus $100 for New Jersey foreign registration up front, then about $600 a year: $400 to Delaware, $75 to New Jersey, and roughly $125 for a Delaware agent. That's about $525 more every year for the same business.

What Delaware's reputation is really about

Delaware's business court and deep body of corporate case law matter to venture-backed companies, their investors, and their lawyers. A one-person LLC is unlikely to ever use them. If you plan to raise venture capital, investors will usually want a Delaware corporation, which is a different filing from an LLC.

Privacy

Delaware's Certificate of Formation doesn't list members or managers, and with no annual report, owner names don't go on the state record. That's a real advantage. Wyoming offers similar privacy for $60 a year instead of $400, and you'd still register under your own name in your home state if it publishes owners.

Form in Delaware if you live in Delaware or the business actually operates here: an office, employees, or customers you serve in the state. If you live elsewhere and heard Delaware is "the best state," it isn't for a solo LLC. Form in the state where you live and work, and put the roughly $500 a year you save toward an accountant.

Who needs a license

Anyone conducting a trade or business in Delaware, including Delaware-based businesses that serve customers out of state. Revenue's triggers are property or a location, employees, or sales in Delaware. Professional licenses don't replace it.

Cost

$75 a year for the first location for most service, professional, and personal-service businesses, and $90 for general retailers. First-year fees for most licenses are prorated. After your first year, you can buy a 3-year license at three times the annual fee.

How and when

Register through Delaware One Stop when you start doing business. You can print a temporary license at the end, and the permanent one is generally mailed within 10 working days. Every license expires December 31 and must be renewed by then.

Gross receipts tax rates

Charged on total revenue with no deduction for expenses. Most service and professional businesses pay 0.3983%, general retailers 0.7468%. Rates range from 0.0945% to 1.9914% depending on the activity.

Exclusion

Most categories exclude the first $100,000 of gross receipts a month (manufacturers get more). If you're a Wilmington freelance designer billing $8,000 a month, you're far under the exclusion.

Filing

New businesses are set up as quarterly filers, with returns due by the last day of the month after each quarter, filed online at tax.delaware.gov. A late return costs 5% a month plus 0.5% interest a month.

Some Delaware cities and counties require their own business license as well, so check your local government before you start. If you're not sure whether your business has enough Delaware presence to need a license, Revenue's Nexus Questionnaire gets you an answer from the state instead of a guess.