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.)
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...
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.
https://www.llcuniversity.com/when-forming-an-llc-who-is-the...
LLC University is great! (More details coming in another comment)
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
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.
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...
Firstbase –– The entire process went very smooth and straight-forward to understand. However, their UI is beyond terrible.
