Ask HN: Forming a Delaware LLC and registered agent
I'm trying to form a Delaware LLC for a new software venture in which I'm the only shareholder. There are lots of services that do this, or I could file the forms myself, but Google search is entirely ineffective finding real recommendations on this topic (every result is an ad or blogspam). How did you form your LLC? If you live in the US and you're setting up an LLC just for yourself, it's cheaper & simpler to form the LLC in the same state in which you live, since a) you can act as your own registered agent, b) you'll still have to register with the state in which you live anyway, and c) it'll be easier to set up a bank account. Delaware in particular can be more pricey than most states, since their infrastructure is oriented towards enabling third-party services (DelawareInc, IncNow, etc) instead of interacting directly with your business. Prepare to wait weeks for them to mail you copies of your documents unless you pay a third-party service to expedite. The advantage of forming in Delaware is that there's lots and lots of settled business case law; but that's generally not relevant to a sole-proprietor LLC. (It is relevant, however, if you're forming a company with the aim of raising venture capital -- in which case you really want a Delaware C-Corp, not an LLC.) Wanted to add on to this as it has a lot of useful info. Be very very sure before you create a C corp if you do go this route. Prepare to pay around $500 in incorporation fees, $400 Delaware franchise fees [1], ~$500 misc filing fees (foreign entity registration, registered agent, tax filing fees @ EOY). If you're required to run payroll (to uhhh.. pay yourself since you're now an employee of a separate corporation / entity):
Gusto is ~$550/yr + the cash you need to pay yourself (which you have to now pay payroll tax on as well as personal income tax). Workers comp, disability and PFL insurance, unemployment insurance, yada yada. Since you're the only shareholder / executive, the minimum wage requirement probably won't apply to you [2][3] but your state might have a minimum requirement per quarter to be eligible for payroll. All in all, expect around $low-single-thousands in expenses just for running and maintaining a C corp per year. You can purchase business items with your personal credit card to get off the ground as long as you keep a good accounting of them and reimburse yourself later but do not do the reverse. Read your corporate docs (bylaws etc), keep meeting minutes, even if by yourself and have a yearly shareholder meeting, even by yourself :D Also, file your 83b election! If this sounds like a lot, probably stick with an LLC in the state you live in :) Hope this helps and feel free to reach out! GLHF [1] https://capbase.com/no-your-startup-doesnt-owe-thousands-of-...
[2] https://www.dol.gov/agencies/whd/fact-sheets/17b-overtime-ex...
[3] https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/s... Thanks for the background on pros/cons of Delaware businesses - knew it was notable for some things but never looked into it much. LLC University is probably the best resource on this: https://www.llcuniversity.com/ Matt explains why you should just register in your home state, not Delaware: https://www.llcuniversity.com/delaware-llc/why-you-shouldnt-... A big discount on LLC registration and Registered Agent fees at the best place to register them online. (Also good explanation of Registered Agents): https://www.llcuniversity.com/when-forming-an-llc-who-is-the... There's enough info on the site to do all the paperwork yourself, if you wanted to. I used https://www.northwestregisteredagent.com/ they have reasonable fees and a good web portal system. If you register via a link in the page below, the NorthWest LLC registration is only $39 ($61 discount), plus you get one year free Registered Agent service (usually $125/year): https://www.llcuniversity.com/when-forming-an-llc-who-is-the... LLC University is great! (More details coming in another comment) I'm also using them for Registered Agent for my Utah LLC (mainly wanted to keep my home address private). I've been happy with them. Oh interesting - I haven’t formed an LLC in Delaware but recently formed one in Washington state. You should check out Delaware state specific websites (probably a .gov) site for all of this stuff. That’s likely where you can file and pay for the whole process. They (the state) should be the primary source of truth for all process/legal information. A quick search turns up https://onestop.delaware.gov/
as the “one stop” page for formation. Just do what they say - you’ll likely need the registered agent handled before filing for the LLC. I’ve heard Delaware has “certain advantages” for business formation so not sure on the specifics there or what that means. Good luck - I’m sure others on here have Delaware specific advice Edit: regarding registered agent - I pay a service to be mine and they also provide a Principal address for the business. If you can it’s probably best to be your own Registered Agent ^ This all the way. Just follow their official docs. https://corp.delaware.gov/howtoform/ At a high level: 1. Search your company name to make sure it is available. https://icis.corp.delaware.gov/Ecorp/NameReserv/NameReservat... 2. Pay a registered agent (say, Harvard Business Services). You will need this for the next step. 3. Fill out LLC Formation document. https://corpfiles.delaware.gov/LLCFormation.pdf 4. Submit completed form to their document upload service. https://corp.delaware.gov/document-upload-service-informatio... Not legal advice. "Huh interesting - had no idea Harvard offered something of this sort. But I've heard from a couple friends who went to grad school there that Harvard actually offers a lot of help for "startup" type ventures for their students/alum - don't recall if it's an incubator of sorts or similar.
I found this all quite fascinating because after my senior eng. capstone project at a UC school one of the teams got into a lawsuit with one of the academic sponsors. Definitely no startup type help/services offered. Surely similar things happen at Harvard/other schools though around i.p. related stuff all the time though" Lol, wrote the above out before actually doing a websearch for Harvard Business Services - turns out it's not affiliated with the university and is just a service/company in Delaware. No knocks on the service was just confused on the name - was curious how they'd maintain a presence outside of Massachusetts... hahaha. i do that all the time. write some draft and then research it only to find out i was totally wrong. i was confused by the name too. now you got me thinking how they managed to not be sued by the university. that's an interesting story. sucks getting into a law suit so early on. and ya, i wonder if school incubators try and lay claim to ip rights. Curious how you went about the WA LLC too — I lived there for a lot of my life and that was my other thought on states to incorporate in. It was easy - I just filled out the forms and paid the gov what they want. Other comments mentioned services that file the LLC for you and that's valid - I chose to just do it "manually" through the .gov websites in WA. Not sure your background but I'm a WA resident so there wasn't any difficulty with stuff - my only caveat (since I rent my house and contractually cannot run a business from it) was the Registered Agent/Principal Address service. But a company can fulfill those roles and it's a non-issue. I used Stripe Atlas to create my Delaware C corp in 2019 and highly recommend I formed LLC in Wyoming last year via Firstbase.io as a non US citizen. I picked Wyoming because it is relatively cheaper than other states & requires very little paperwork. Firstbase –– The entire process went very smooth and straight-forward to understand. However, their UI is beyond terrible. How much are you paying for this? Someone should make a single-use website for where to incorporate, i.e. "i want to register my [whatever company type] in [state]" and it tells you all the costs associated with it I want to do this in the future.
Stripe Atlas looks good https://stripe.com/atlas Run this by your attorney.