When most entrepreneurs are starting their own company, they often look at a Delaware Limited Liability Company (or LLC) first. This is no surprise, since Delware is one of the most business-friendly states. What does this mean? First of all, at least 60% of Fortune 500 companies are in Delaware. This makes their courts able to handle even the trickiest litigation issues when it comes to businesses. Also, their laws are often good for business. For example, they don't tax out-of-state income. This is why many new entrepreneurs set out to form a Delaware LLC.

First things first: what is a limited liability company (LLC)? Basically it's a kind of company structure that allows its members or owners to have legal protection, also known as limited liability, from any debt or creditors that the company has. In other words, your personal assets will be protected in case the business goes into debt. This is often the first company structures that new business owners set up because it is simpler than a corporation.

Once you've decided to form a Delaware LLC, you need to choose a name for your company. Think of a list of 3 to 5 names and inquire with the Delaware Division of Corporations to make sure that the name you've selected is unique and doesn't violate any rules or trademark regulations. Remember to include the acronym LLC after your company name (eg. Acme Merchandise LLC). Then, file a name reservation application with the Delaware Division of Corporations to reserve the name for your Delaware LLC. As of this writing, the cost of this application is around $75.

After that, you'll need to gather the neccessary paperwork to set up your Delaware LLC. You'll need to file an application form and pay the registration fees. Unless you use the expedited 1-hour service, you'll only spend less than $150 and you'll receive your formation documents within a week.Though you can create an operating agreement for your company, it's not a legal requirement for a Delaware Limited Liability Company.

For more information on setting up a Delaware LLC, call the Delaware Division of Corporations at (302)-739-3073

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