A Delaware LLC Operating Agreement is a legal document employed to capture information concerning how a limited liability plans on conducting operations presently and in the future. The arrangement serves to establish protocols for maintaining the business as well as solidify an understanding of roles amongst members for LLCs owned by multiple members. Delaware is one of five (5) states that obligate an operating agreement to be produced and submitted alongside official formation paperwork to formally file for LLC status.
Laws
LLC Statutes – Delaware Code – Title 6, Chapter 18: Limited Liability Company Act (§ 18-101 – 18-1208)
Operating Agreements – § 18-111
Definitions – § 18-101(9)
Formation – § 18-201 – 18-221
By Type (2)
Multi-Member LLC Operating Agreement – Allows a business owned by more than one member to institute a contract providing a comprehensive outline of operating expectations for the company.
Download: Adobe PDF, MS Word (.docx)
Single-Member LLC Operating Agreement – Produces a concrete summary to map out how an LLC will be run for those companies that a single individual owns.
Download: Adobe PDF, MS Word (.docx)
Create an LLC in Delaware (5 Steps)
To legally operate as a limited liability company, various tasks must be completed in order to successfully adhere to state law. Take the following steps to ensure you correctly set up your company to do business as an LLC.
- Step 1 – Choose a Name for the Business
- Step 2 – Appoint a Registered Agent
- Step 3 – File Certificate of Formation
- Step 4 – Instate an Operating Agreement for the LLC
- Step 5 – Complete Any Additional Required Tasks for the Company
Step 1 – Choose a Name for the Business
Each company registered as an LLC is obligated to select a name that is unique and meets the guidelines set forth by Delaware Code § 18-102. State law stipulates that in addition to the entity name being distinctive, it must also include one of the following within the name: “Limited Liability Company”, “L.L.C.”, or “LLC”. You can access the Division of Corporations’ website and input the name you would like in the “Entity Name” field. Click on the “Search” button to make sure to verify if the desired name is available.
When filing for formation, the selected name can be indicated with the application to secure the name. Companies that wish to reserve a name before submitting formation paperwork (optional) can do so online or by mail:
- Online – Filing a name reservation online will require the registration of an account using the Deleware Division of Corporations website. Once an account is created, visit the Name Reservation page and follow the prompts to complete the submission.
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- Fees: A $75 fee must be paid to submit the reservation request. Payments can be made with a major credit/debit card or a bank account upon completion of the electronic form.
- Mail – Alternatively, if a business elects to reserve an entity name by mail, the Application for Name Reservation of LLC Name form can be downloaded and filled out for submission. When sending completed forms to the Division of Corporation, all must be accompanied by a finalized Document Filing Sheet (Memo Page). Seal all required paperwork in a stamped envelope, along with the associated fees, and send it to the address below:
By Mail:
Delaware Division of Corporations
401 Federal Street, Suite 4
Dover, DE 19901
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- Fees: A $75 payment by check must be included with the paper application and can be made out to “Delaware Secretary of State”.
Step 2 – Appoint a Registered Agent
When a business decides to register and be classified as an LLC, a representative or entity must be assigned to the registered agent role. A registered agent can be a person or commercial firm designated to receive any legal notifications on behalf of the company. Qualified agents must be:
- Eighteen (18) years of age or older (individuals)
- A current resident of Delaware (individuals)
- Available during regular business hours
- Approved to do business in the state (entities)
For a record of registered agents authorized to transact in Delaware, review the provided listing on the Division of Corporations website.
Step 3 – File Certificate of Formation
Step 4 – Instate an Operating Agreement for the LLC
Delaware is only one of five (5) US States that mandate the submission of an executed operating agreement to originate as an LLC in an official capacity. Producing the contract creates a legal outline summarizing formation information along the lines of initial contributions as well as distributions to named members or managers moving forward. Additional expectations can be confirmed regarding voting rights, roles, and protocols for various future scenarios for the business. The above-provided form can be used, or one of the ownership-specific forms below can be utilized depending on how many individuals claim an ownership interest in the company:
Step 5 – Obtain a Federal Employer Identification Number (FEIN/EIN)
It may be necessary to register your company with the IRS using their Federal ID system that assigns a number to identify the business within their nationwide database appropriately. Even in cases where your LLC does not require an EIN for tax purposes, it can still be helpful when applying for loans or seeking funds from outside investors. Applying for an EIN is as simple as using your web browser to navigate to the IRS website. From there, click on “Apply Now” to fill out the electronic form to be granted your identification number upon completion.
Additional Resources
- Delaware Department of State – Division of Corporations
- Internal Revenue Service – Employer ID Numbers