Chris Maury's Blog

How to Form an LLC in 5 easy steps

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This is a repost from my old blog, saving it for posterity.

Alan wrote a post on setting up an LLC for Abroadcare.com and why we chose Delaware. Here I’m going to lay out the actual steps we took in registering, so that if you ever need to incorporate you can do it much more easily than we did. It took quite a while to understand all the steps involved, but once we figured it out, its really not that bad.

There are plenty of reasons on why you should form an LLC. See here. Once you decide to incorporate, here are the steps you need to follow:
1. Obtain a registered Agent: Annual fee of $120Any company which incorporates must have a registered agent in the state of incorporation. If you are incorporating in your own state than you can be your own agent and save yourself the yearly fee. However, Delaware doesn’t really have the start up scene that most people are looking for, so chances are you are going to need to hire a Registered Agent.

We decided to go with National Registered Agents, Inc, which gives you a personal representative and an online account management system. They also seemed much less scamy than many of the other services we looked at.

2. Submitting your Certificate of Formation: one time fee of $90The actual letter of incorporation is very simple and seemingly a pointless formality. The accompanying cover letter (also required) is closer to a tax form than it is to a cover letter.

You can find the cover letter here and the form here.

Once completed you can mail these forms to:
Division of Corporations
John G. Townsend Building
401 Federal Street Suite 4
Dover, DE 19901

or fax them to:
302-739-3812

You may need a Certificate of Status or a Certificate of Good Standing in order to open a business account with your bank. I would suggest finding an alternative banking solution, but if not, this form can be requested at the time of filing for an additional fee of $50.

3. Annual Taxes: $250The state of Delaware charges this franchise fee yearly and is due no later than June 1st.

4. Applying for a Federal Tax ID number: Free
Unlike getting a driver’s License, obtaining the birth certificate for your company is quick, easy, and can be done online. Apply here.

5. Thats it! You’re done!

So the total cost of incorporating your online business in Delaware is $210 for the first year and  $370 for every year after that. Not too shabby.

Filing on your own, while involving a few steps, is relatively painless (once you know where to look). There are services which will take care of everything for you, but they charge a little more. We didn’t find one less than $300. So, if you are looking to save money, filing on your own is the way to go. You can expect to wait up to two months for your paperwork to be mailed back to you (we are still waiting on ours) but you can pay a little extra and have them expedited.

Hope this helps!