Complete Guide to Forming an LLC in Dover, Delaware

Overview: LLC Formation in Dover, Delaware

Forming a Limited Liability Company (LLC) in Dover, Delaware requires compliance with both state-level and city-level requirements. Dover, as Delaware's state capital, hosts the main offices of the Delaware Division of Corporations, making it the administrative center for all Delaware LLC formations. The Delaware Limited Liability Company Act, codified in Title 6, Chapter 18 of the Delaware Code, governs LLC formation statewide, while the City of Dover imposes additional local licensing requirements.

Step 1: Choose Your LLC Name

Delaware LLC Name Requirements

Delaware statute 6 Del. C. § 18-102 establishes mandatory naming requirements for all Delaware LLCs. Your LLC name must:

• Include the words "Limited Liability Company" or the abbreviation "L.L.C." or the designation "LLC"
• Distinguish itself from all existing entities registered with the Delaware Secretary of State
• Avoid restricted words such as "Bank," "Insurance," "Trust," or "University" without proper authorization

Verify Name Availability

Check name availability using the Delaware Division of Corporations Entity Name Search. This free online database searches all registered Delaware business entities including corporations, LLCs, partnerships, and statutory trusts.

Optional Name Reservation

The Delaware Division of Corporations allows name reservations for 120 days at a $75 fee. Name reservation guarantees availability while you prepare formation documents but is not mandatory for LLC formation.

Step 2: Appoint a Delaware Registered Agent

Registered Agent Requirement

Delaware law requires every LLC to maintain a registered agent with a physical Delaware street address. The registered agent accepts service of process and official correspondence from the state on behalf of your LLC.

Selecting Your Registered Agent

Step 3: File the Certificate of Formation with Delaware

Certificate of Formation Requirements

Form your LLC by filing a Certificate of Formation with the Delaware Division of Corporations. According to 6 Del. C. § 18-201, the certificate must include:

Filing Location in Dover

Filing Methods and Fees

Certified Copies

Request a certified copy of your Certificate of Formation for $50. Most banks require certified copies when opening business bank accounts.

Step 4: Obtain a Federal Employer Identification Number (EIN)

EIN Requirements for Delaware LLCs

The Internal Revenue Service requires most LLCs to obtain an Employer Identification Number. According to IRS guidelines, you need an EIN if your LLC:

• Has employees
• Files excise tax returns
• Withholds taxes on non-wage income paid to non-residents
• Has more than one member (multi-member LLCs default to partnership taxation)
• Elects corporate tax treatment

Step 5: Create an LLC Operating Agreement

Operating Agreement Requirement

Delaware mandates that LLCs adopt an operating agreement. Under 6 Del. C. § 18-101(9), an LLC operating agreement is "any agreement (whether referred to as a limited liability company agreement, operating agreement or otherwise), written, oral or implied, of the member or members as to the affairs of a limited liability company and the conduct of its business."

Delaware does not require filing the operating agreement with the state, but the LLC must have one in place.

Operating Agreement Content

An effective operating agreement should establish:

Legal Framework

Delaware statute 6 Del. C. § 18-402 provides default management rules. Unless the operating agreement specifies otherwise, management vests in members proportionally to their profit interests, with decisions requiring approval from members owning more than 50 percent of profit interests.

Step 6: Register for Delaware State Business License

State Business License Requirement

The Delaware Division of Revenue requires any person or entity conducting business in Delaware to obtain a state business license. This requirement applies to all Delaware LLCs, whether they operate within Delaware or conduct business from a Delaware entity outside the state.

Registration Process

Register through Delaware One Stop Business Registration, which enables simultaneous registration with:

• Delaware Division of Revenue (business license)
• Division of Unemployment Insurance (if you have employees)
• Division of Workers' Compensation (if you have employees)

Processing Time and Temporary Licenses

Most businesses receive their Delaware business license within one month. Upon completing online registration, you can print a temporary license immediately. Permanent licenses arrive by mail within approximately 10 business days.

Step 7: Obtain City of Dover Business License

City Business License Requirement

The City of Dover requires all businesses operating within city limits to obtain a City of Dover business license. This municipal requirement applies in addition to the state business license. According to Dover's Planning FAQ, all businesses in the City must obtain a City of Dover business license before commencing operations.

Business License Application

Obtain the City of Dover Business License Application from City Hall or download from the city website. The application requires:

• Name and business address
• Trade, business, or occupation for which license is requested
• Affirmation that applicant has complied and will comply with all city ordinances
• Applicant signature

License Display Requirement

City of Dover requires license holders to conspicuously display their business license in the principal office of their place of business.

City Business License Fees

City of Dover business license fees vary by business type and are calculated based on factors including business classification and gross receipts. Contact the Department of Planning and Inspections at (302) 736-7010 for specific fee information applicable to your business type.

Step 8: Kent County Considerations

No County Business License Required

Kent County, where Dover is located, does not require a general business license for most businesses. However, specific activities may require county permits.

Kent County Permits and Licenses

Contact Kent County for information about specific permits:

Building permits and certain specialized permits may be required depending on your business activities and location within Kent County.

Step 9: Delaware Annual LLC Tax

Annual Tax Requirement

Delaware requires all LLCs to pay an annual tax of $300 to the Delaware Division of Corporations. This flat-rate tax applies to all Delaware LLCs regardless of income, revenue, activity level, or business location.

Consequences of Non-Payment

LLCs that fail to pay the annual tax by June 1st lose good standing status with the Delaware Secretary of State. The state will not accept any certificates for filing until the LLC pays all outstanding annual taxes.

No Annual Report Required

Delaware LLCs do not file annual reports. The only annual requirement is the $300 tax payment, making Delaware compliance relatively simple compared to other states.

Step 10: Delaware Gross Receipts Tax Registration

Understanding Delaware's Gross Receipts Tax

Delaware does not impose traditional sales tax. Instead, the Delaware Division of Revenue administers a gross receipts tax on businesses selling goods or providing services in Delaware.

Registration and Filing

Register for gross receipts tax through Delaware One Stop when obtaining your Delaware business license. File and pay gross receipts tax returns through the Delaware Taxpayer Portal.

Why Dover is Delaware's LLC Administrative Center

Strategic Location

Dover serves as Delaware's state capital and houses the main offices of the Delaware Division of Corporations. This makes Dover the administrative center for all Delaware LLC formations, regardless of where the LLC actually conducts business.

Physical Presence in Dover

The Delaware Division of Corporations maintains its primary office in Dover's John G. Townsend Building. All official Delaware LLC documents are filed and processed through this Dover location, making Dover the focal point of Delaware's business entity administration.

Local Advantages

LLCs with physical operations in Dover benefit from:

Cost Summary: Forming an LLC in Dover

Contact Information Directory

Dover LLC Formation Checklist

Additional Resources