Delaware compliance for single-member LLC

Summary of research and key findings on Delaware compliance for single-member LLCs: Formation and basic governance - File a Certificate of Formation with Delaware Division of Corporations and designate a Delaware registered agent with a physical Delaware street address (PO boxes not allowed). Delaware does not require filing an operating agreement, but one is strongly recommended to document ownership, management, and to help preserve liability protection. Federal and state tax classification - A single-member LLC may be taxed as a corporation if it files IRS Form 8832; otherwise it is a “disregarded entity” for federal tax purposes and is treated as a sole proprietorship. Delaware follows federal classification, so a single-member disregarded entity generally does not file a separate state business income tax return; the owner reports income on their personal return. Ongoing Delaware state filings and payments (most important): - Annual alternative entity tax: All domestic and foreign LLCs formed or registered in Delaware must pay an annual tax of $300 to the Delaware Division of Corporations. There is no annual report filing requirement for LLCs, but the $300 tax is due on or before June 1 each year. Failure to pay incurs a $200 penalty plus 1.5% interest per month on tax and penalty. - Series LLCs: where applicable, each registered series has a separate smaller annual tax ($75) in addition to the parent entity tax. State business licensing and transactional taxes - Delaware generally requires a state business license (Division of Revenue) for businesses operating in Delaware (a general business license is commonly required; fees vary). Delaware does not have a sales tax, but it does impose a gross receipts tax on sellers and service providers (rates and filing frequency depend on business activity). If you hire employees, you must register for employer withholding and unemployment accounts. Beneficial ownership (BOI) reporting (FinCEN/Corporate Transparency Act) - Under FinCEN’s BOI rule, many LLCs are “reporting companies” and must file beneficial ownership information with FinCEN. Initial-report timelines depend on when the entity was created/registered: generally an existing company had a 90-day filing window; companies created/registered on or after Jan 1, 2025 have a 30-day deadline (see FinCEN guidance for exact timelines and exemptions). BOI reports are submitted to FinCEN and are not publicly disclosed under FOIA. Check FinCEN’s BOI FAQs and small-entity compliance guide for details and exemptions. Key practical compliance steps for a Delaware single-member LLC (checklist) 1. Form: File Certificate of Formation with Delaware Division of Corporations and name a registered agent with a physical Delaware address. Keep proof of formation. 2. Governance: Draft and sign an operating agreement (even for single-member LLC) and keep it with your company records. 3. EIN: Obtain an EIN from the IRS if you will hire employees, open bank accounts, or to satisfy banking/third-party requirements (even if taxed as disregarded). 4. Delaware business license: Register with the Delaware Division of Revenue to obtain the required state business license and to determine gross receipts tax obligations; register for employer accounts if hiring. 5. Annual state tax: Pay Delaware annual LLC tax ($300) by June 1 each year (no LLC annual report required). Note penalties for late payment ($200 + interest). If you have a Series LLC, budget for additional series-level taxes. 6. BOI reporting: Determine whether your LLC must file a BOI report with FinCEN and meet initial and updated reporting deadlines; maintain accurate beneficial ownership records. 7. Foreign qualification: If conducting business outside Delaware, register (qualify) in other states as required and monitor those states’ compliance obligations. 8. Recordkeeping: Maintain separate bank accounts, minutes/records, tax filings, licenses, and up-to-date contact with your registered agent to preserve liability protections and good standing. Common penalties and risks - Falling out of good standing for nonpayment of the annual tax can prevent the Division of Corporations from filing documents or issuing certificates of good standing and can bar access to Delaware courts until restored. Late payment penalties and interest apply. BOI noncompliance may result in civil penalties under the CTA/FinCEN rules. Next steps for producing the blog/newsletter content - Use the checklist and the state-specific facts above to create a blog post covering formation, governance, taxes, licenses, BOI reporting, timelines, costs, and a practical compliance calendar for a Delaware single-member LLC. Include links to the Delaware Division of Corporations payment/instruction pages, Delaware Division of Revenue LLC FAQs, FinCEN BOI guidance, and a reputable secondary source (Nolo or BizFilings) for reader-friendly explanations and examples.