The decision of what kind of entity to establish is one of the most crucial ones to make when starting a business. Due to its adaptability, robust legal protections, and tax advantages, the limited liability company (LLC) structure is popular among business owners in Delaware. However, some may question if the articles of formation, which are important for other kinds of businesses, are necessary for a Delaware LLC.
The short answer is no—Articles of Organization are not required for Delaware LLCs. The Delaware Division of Corporations must get a Certificate of Formation from an LLC instead, under state law. This document, which serves as the LLC’s founding agreement, contains crucial details about the business, such as its name, registration agent, duration, and management structure.
A Delaware Certificate of Formation’s file number is a special identification code that the state assigns to every LLC. This number can be used to confirm the LLC’s existence and good standing with the state and is crucial for keeping track of the company’s legal and financial activity.
A few additional fundamental documents are needed in addition to the Certificate of Formation for a company to be incorporated in Delaware. A formal operating agreement that describes the organization’s internal management and ownership structure may be among them, as well as any licenses or permits required for the company’s operations.
It is important to be aware that the founding document for corporations, the Certificate of Incorporation, differs from the Certificate of Formation. Despite the fact that both documents have a similar function, the Certificate of Incorporation is unique to companies and contains extra information, such as the total number of authorized shares of stock and information on the board of directors.
In conclusion, articles of organization are not necessary for a Delaware LLC. Instead, a Certificate of Formation, which serves as the company’s founding document, must be submitted to the state. An operating contract and any applicable licenses or permissions could be additional required paperwork. Any business owner wishing to create a successful LLC in Delaware must be aware of these requirements.
An LLC that permits the creation of distinct “series” or compartments, each with its own assets, liabilities, and members, is known as a Delaware series LLC. Similar to a subsidiary, each series runs independently, but with the added advantage of being able to pool resources and oversee operations. The assets of each series are better protected by this structure, and the corporation as a whole has more flexibility. In order to establish a series LLC in the state of Delaware, the business must submit a Certificate of Formation to the Delaware Secretary of State and contain a clause that permits the formation of series inside the LLC.