How to start an LLC in Delaware and what people leave out about the yearly tax

Delaware is easy to pitch and easy to romanticize. The actual filing process is simple: pick a name, appoint a Delaware registered agent, file a Certificate of Formation, and pay the state filing fee. The part founders forget is that Delaware keeps charging you every year whether the LLC made money or not.

Checked against Delaware Division of Corporations materials on August 31, 2026.

What Delaware actually requires

The Delaware Division of Corporations says every business entity formed there must maintain a registered agent in Delaware with a physical street address in the state. If your business is physically located in Delaware, the business may act as its own registered agent. If not, you need to hire one.

That rule matters more than some founders expect. A Delaware LLC is not just a piece of paper you file from anywhere and then forget. The state wants a real in-state contact on record from day one.

The filing document and the formation fee

For a domestic Delaware LLC, the core filing is the Certificate of Formation. Delaware's August 2026 fee schedule lists the filing fee for a domestic LLC formation at $110. Delaware also sells faster processing if you are in a hurry: same-day service adds $100 and 24-hour service adds $50. Priority services cost more.

That means the normal path is not expensive by Delaware standards. The state has a premium reputation, but the initial LLC filing itself is not the part that usually hurts.

What the name has to do

Before filing, Delaware lets you check name availability and reserve a name if you want extra certainty. The Division says name reservation is optional, not required, and holds the name for 120 days. The reservation fee is $75.

If you are ready to file now, most people skip the reservation. If you are still lining up partners, a closing date, or documents in another state, the 120-day hold can be useful.

What you pay up front and later

Delaware LLC step	Cost or rule
Certificate of Formation filing fee	$110
Name reservation	Optional, $75 for 120 days
Registered agent	Required in Delaware
Annual Delaware LLC tax	$400 per year
Annual tax deadline	Due on or before June 1
Late annual tax penalty	$200 plus 1.5% interest per month on tax and penalty

The yearly tax is the real Delaware habit

The Delaware Division of Corporations says LLCs do not file an annual report with the Division, but they do have to pay a $400 yearly tax on or before June 1. The state also says there is no proration. If the entity is active in the records at any point during the calendar year, the tax applies.

This is the part that makes Delaware different from the way people talk about it on social media. You may hear "Delaware is easy." It is easy to form. It is not free to keep around.

What Delaware does not do for you

Delaware gives you the entity. It does not automatically give you an EIN, local licenses, a bank account, or tax setup. After approval, many founders get an EIN from the IRS right away because banks, payroll providers, and many payment platforms ask for it. The IRS says an EIN can be obtained free on IRS.gov, and the online application must be completed in one session.

That order matters. Form the LLC first. Then get the EIN. Then handle the rest of the operating setup.

When Delaware makes sense

Delaware can make sense if investors, lawyers, co-founders, or expansion plans are already pushing you there. It can also make sense if you want the entity there for structural reasons and understand the extra admin.

It makes less sense when a small local business owner hears that "everyone serious uses Delaware" and assumes that means it is the cheapest or simplest option. It often is not. If you operate in another state, you may still need to register there as a foreign LLC and comply there too.

Why founders hire help anyway

Delaware formation is not complicated, but it is one of those jobs where people get tripped up by sequence and maintenance. You need the agent lined up before filing. You need the name right. You need to remember the June 1 tax even though there is no annual report form. And if you are doing business outside Delaware, you need to think beyond the first filing.

That is why registered agent and formation services convert well on Delaware pages. They are selling convenience, but they are also selling fewer loose ends.

Bottom line

To start a Delaware LLC, appoint a Delaware registered agent, file the Certificate of Formation, and pay the $110 state filing fee. Then calendar the annual $400 Delaware tax due on June 1, because that is the ongoing obligation people miss. Delaware is simple at formation and persistent after formation. You want to understand both parts before you decide it is the right state for you.