Business entities in Delaware

The commonly preferred business entity in Delaware is the limited liability company (LLC). However, our Clients may also choose to incorporate alternative business entities including a C-corporation, an S-corporation and a branch office.

The Limited Liability Company (LLC)

Setup LLC in Delaware

  • In Delaware, an LLC can be formed with 1 director and 1 shareholder. There is no requirement for directors or shareholders to be US nationals. Furthermore, there is no minimum share capital requirement;
  • A Delaware LLC can choose to be taxed either as a corporation (if 1 or more shareholder) or as a partnership (if 2 or more shareholders) or as a disregarded entity (if only 1 shareholder). If the LLC is taxed as a partnership or as a disregarded entity, its income will not suffer any corporate tax. Instead, the income will flow through to the shareholders who will pay personal tax. On the other hand, an LLC taxed as a corporation will have to pay corporate tax as well;
  • In Delaware, the identities of directors and shareholders will not made available to the public;
  • Best uses: This entity is used for starting a small company in the United States.

The C-Corporation (C-Corp)

  • Like an LLC, the C-Corp can be incorporated with i) 1 director and 1 shareholder of any nationality and ii) US$1 as the share capital. Furthermore, a Delaware corporation enjoys the same privacy benefits as the LLC;
  • A Delaware corporation does not require a resident director or physical address for incorporation;
  • A C-Corp is recommended when a company wishes to raise capital from the public. Nevertheless, it is not mandatory for the C-Corp to be listed on the US stock exchange(s);
  • Best uses: This entity may be used when our Clients intend to raise capital by listing on the local stock exchange.

Branch Office

  • Foreign LLCs and corporations are allowed to setup branch offices in Delaware. The branch office will have a registered agent and an address in Delaware. To setup a branch office, companies must submit i) the completed foreign qualification form and ii) a Certificate of Existence (cannot be older than 6 months);
  • A branch office will be allowed to practice all activities as their parent entity (LLC or Corporation). Furthermore, the branch office will also be required to pay annual franchise taxes:
  • Best uses: This entity may be used when our Clients prefer booking all their income under 1 company’s name.

The Limited Liability Partnership (LLP)

  • As an alternative to the LLC, our Clients may setup an LLP. Such entities will have at least 1 member and 1 manager, who may not be US residents or nationals;
  • An LLP is taxed an LLC i.e. no tax will be imposed on the proportion of income attributed to each member;
  • Best uses: An LLP is used extensively to provide professional services. e.g. – Accounting Firms, Law Firms.

Free Zone company

  • Our Clients also have the option of registering their businesses in one of Lastly, our Clients will have the option of setting up a free zone company in Delaware’s Wilmington Free Zone;
  • For this purpose, our Clients will i) incorporate a new entity and ii) thereafter, apply for an operating permit in the free zone;
  • Best uses: A free zone company is recommended when our Clients wish to setup an export oriented manufacturing business.

Different types of business entities in Delaware

 LLCC-CorporationBranch OfficeLLPFree Zone Company
How long to set the company up?1 week2 weeks1 week1 week1 week
How long to open company bank account?4 weeks4 weeks4 weeks 4 weeks 4 weeks
Issued share capital requiredUS$0US$1N/AUS$1US$1
Allowed to sign sales contracts with local Clients?YesYesYesYesYes
Allowed to invoice local Clients?YesYesYesYesYes
Delaware corporate tax payable?0%0%0%0%0%
Federal corporate tax payable?0%35%0%0%0%
Withholding tax rate payable?35%0%35%35%35%
Corporate bank accountBNY MellonWells FargoBank of AmericaU.S. Bank Wells Fargo
Can rent office premises in Delaware?YesYesYesYesYes
Allowed to import raw materials?YesYesYesYesYes
Allows to export goods?YesYesYesYesYes
Can the entity hire expatriate staff in Delaware?YesYesYesYesYes
Tenancy agreement required before incorporation?NoNoNoNoNo
Do you visit Delaware for company incorporation?NoNoNoNoNo
Individual shareholders allowed?YesYesYesYesYes
Corporate shareholders allowed?YesYesParent CompanyYesYes
Corporate director(s) allowed?NoNoNoNoNo
Resident director required?NoNoNoNoNo
Resident agent required?YesYesYesYesYes
Resident shareholder required?NoNoNoNoNo
Minimum number of directors/managers?11111
Minimum number of shareholders11Parent Company11
Public register of shareholders and directorsYesYesYesYesYes
Statutory audit required?NoNoNoNoNo
Annual tax return to be submitted?YesYesYesYesYes
Access to US double taxation treaties?YesYesYesYesYes
Estimate of engagement costsUS $US $US $US $US $
Total Delaware business setup costs in Yr. 18,9006,8608,8438,0008,910
Subsequent annual costs (incl. accounting and tax fee)3,7003,7004,5004,5504,550
Healy Consultants InvoiceFrench LLC setup costDelaware C-Corporation setup costDelaware branch office setup costDelaware LLP setup costDelaware freezone company setup cost

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Contact us

For additional information on our company setup services in Delaware, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Paavan Chhabra, directly:
client relationship officer - Paavan