The State of Delaware (USA) (Corporations, LLC)

The State of Delaware (USA) (Corporations, LLC)

Delaware is one of the states in the US.  Legislation of Delaware is convenient from a business perspective, especially for large managing corporations.

The advantages of Registering a Limited Liability Company (LLC) in Delaware (US):

A limited liability company is a kind of combination of corporation and partnership. Like a corporation, a limited liability company is a separate legal entity, independent of its participants. In this regard, participants are not personally liable for debts and obligations of the limited company. The advantage of a limited liability company compared to a limited liability partnership is the absence of such a category as a general partner, who is personally liable for obligations of a partnership.

LLC incorporated in Delaware (USA) has several advantages:

• Can be created by one person (resident and nonresident of the USA, individual and legal entity). The presence of the Director (manager) is not required. LLC can be managed by the participant(s). Maximum number of participants of an LLC is not limited;
• Participants are not personally liable for debts and obligations of an LLC. The amount of liability of a participant limited to the size of its contribution (like in corporations);
• An internal organisation of relations between the participants of an LLC is flexible, with a high degree of optionality, which means the possibility to envisage in the Agreement of the company participants any conditions on the profits distribution, to create classes and groups of participants endowed with special rights and privileges, etc.;
• If a limited liability company has been formed by a non-resident foreigner and has operations in the US, then it should not pay federal taxes. LLC, in this case, must pay a franchise tax imposed on legal entities in Delaware. The rate for LLC is a fixed amount of 250 US Dollars per a year;
• No requirements to minimum capital of an LLC;
• Profit of an LLC may be distributed in any manner, which afreed between participants of the LLC in the Agreement of Company Participants, regardless of the size of the contribution of a participant.

Also in the US there are the following types of companies - corporation, partnership (general or limited liability company).

Registration Procedure

Corporation: prepares and signs the articles of association, develops the Charter, after that the articles and the registration application are filed to the secretary of state.

Corporate tax rate is from 15% to 34%, the state has a fee to be paid - 60 US Dollars (since 2004).

Partnership: partners should provide the secretariat of state with a signed certificate containing information about the activities of the partnership, its members, capital structure, etc.

Taxes are paid from income of their member-entrepreneurs at the maximum personal rate of 28%, if the partners are residents of the United States.

Limited Liability Company (LLC): the secretariat of the state should be submitted a certificate of a company with the name, legal address, name and address of the registered agent, and the date of LLC liquidation, if such date is specified in the LLC Agreement.

Taxation of an individual owner; there is an annual fee in the state of 200 US Dollars (since 2004).

General Table of Requirements to the Companies in Delaware

Please note that this information may be changed from time to time and shall be re-checked by experts of the relevant jurisdiction. To obtain updated information and information on the cost of registration, please contact our representatives.