Facts & Info for USA Delaware Limited Liability Company Formation
General information
Company structure
- Only one shareholder An LLC does not issue shares and therefore does not have shareholders. The owners of an LLC are referred to as members. A Delaware LLC may have a minimum of one Member (owner) or more. Each member of a Delaware LLC is liable only to the extent of his or her percentage of ownership in the LLC. Members may be an individuals or corporate bodies. There is no limit on the number of members allowed in a Delaware LLC.
- The management of a Delaware LLC is based on an agreement between its owners, who are known as members. A Delaware LLC allows a customized management structure, which dictates the economic relationship among owners. While Delaware law permits a Delaware LLC to be managed by its members, it does not require members to be managers. The Delaware LLC statute allows parties to define their business relationship in the written agreement however they wish. This is called Freedom of Contract. Delaware Law provides rules only for those matters on which the parties have failed to agree. The contractual flexibility offered by the Delaware Act is unmatched by any other LLC statute. For example, unlike a corporation, an LLC can distribute profits in any manner described in the LLC agreement, regardless of ownership share. The structure of the LLC does not provide for a Board of Directors.
Confidentiality
- Beneficial owners' details – Disclosed to the authorities
- Shareholders' details – Not part of public record
- Directors' details - Not part of public record
Taxation
Delaware Limited Liability Company (LLC) does not pay US state or federal income tax if its owners are not US citizens or green card holders, its offices are located outside of the U.S., and the LLC does no business in the U.S. The IRS tax treatment of a Delaware LLC is on the flow-through tax basis. That is the LLC is not taxed on its profits. The income of the LLC is distributed to its members who are taxed on a personal income basis.
Non-resident aliens are not taxable by the U.S. on income derived out of the U.S. If an LLC derives its income outside of the U.S., the non-resident aliens do not file tax returns.
Other benefits
There are no statutory requirements concerning meetings of members or record keeping. It is recommended that with two or more members, Members’ Agreement be entered into. If meetings are held by members, this may be done anywhere in the world and in any way convenient to the members.
Accounting requirements
Delaware LLC is not required to file state or federal tax returns. Whilst there is no requirement to file audited accounts or annual returns with the authorities, a company is required to keep financial records, which should reflect the financial position of a company. An Annual Report is required only in cases, where there is distribution of profits to U.S. residents.
Secretary
Optional, although it is customary to have one (can also be a legal person, no nationality or residency restrictions)
Registered Agent
Required
Registered office
Required
Company name
- Language: Any
- Letters: From Roman alphabet
- Company name must end with such suffixes or their abbreviations: Limited Liability Company, Limited Company
- Restricted words: Bank, Trust, Insurance, Reinsurance
- Names Requiring Consent or a Licence: Bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, university, municipal
N.B.
- Restricted connections for company name: name of state, national or local government.
- Any name that implies illegal activity or implies royal or government patronage is restricted.
- Registrar may reject any name which it considers undesirable or contrary to the public interest.
- Company name is restricted to be identical or similar that of an existing company.
- In case when foreign language is used for company name the translation must be provided to Registrar which will ensure conformity to above listed restrictions.
Incorporation
- Name check and approval
- Filling the incorporation documents with the Delaware Division of Corporations
- Payment of the government fees (renewed by May 31, irrespective of the date of incorporation)
- A standard set of original corporate documents
- Provision of registered agent and registered address for one year
Please provide us with the following documents and data:
Incorporation
- A notarized copy of valid passport (of each Shareholder, Director, Beneficial Owner, Authorized Signatory)
- A copy of proof of residential address (ex. utility bill of each Shareholder, Director, Beneficial Owner, Authorized Signatory that is not older than 3 months) in English
- Optional: A notarized copy of Bank reference (of each Shareholder, Director, Beneficial Owner, Authorized Signatory)
- Optional: CV (of each Director and Shareholder)
N.B.
- If Shareholders and/or directors are legal persons, then it is required to submit full set of apostilled company documents and if company is operating more than 1 year it is required to submit certificate of Good Standing.
- If documents are not in English language or language of particular country, then they must be accompanied by a notarized translation.
Capital
- Amount of paid up capital
Company name
- Three company names in order of preference