Case Study - Delaware L.L.C and Corporation?

For better recognition on L.L.C and Corporation, let's take Google and YouTube for exampleGoogle is a Corporation and YouTube is an L.L.C. Why did they choose different entity types?The L.L.C vs Corporation distinction is clearly defined by this one example that the new generation of entrepreneurs should take full take advantage of.YouTube actually started as a corporation, filing its Certificate of Incorporation with the Delaware Division of Corporations on October 3, 2005. On November 8, 2006, just 13 months and five days later, it merged its Corporation into an L.L.C, which is one of the key advantages of Delaware companies: they can change from one form of entity to another, whenever they want.Read more: Advantages of Delaware LLCYouTube L.L.C, on the other hand, is owned by a few members. Nobody but the insiders know how few, and nobody but the insiders know who the owners are. In addition, nobody but the owners know what the company finances are, because no public disclosure is required. That’s the benefit of a Delaware L.L.C—your members, their ownership percentages and your financial valuation are private matters, of which only the company insiders are aware. There is no public registration, no public disclosure and no federal requirement of any type that necessitates the owners of a Delaware L.L.C to reveal who they are on the public record.Google chose to be a Delaware Corporation so it could go public and raise money, which they did on August 16, 2004. Once it did so, it quickly became one of the richest companies in history. Google's rise to power created tens of thousands of millionaires and a lot of billionaires. Even though 60% of Google is owned by institutions, there are millions of individual shareholders in the company. The company has current cash reserves of $50 billion.Read more: How to set up a Delaware company? Delaware llc taxation for non US residents

Why should you choose OffShoreCompanyCorp to register new company in Delaware, USA?

Forming a Delaware corporation is easy with us. You can select which type of corporation you'd like to form, choose whether you'd like to obtain a Federal Tax ID Number and more. We also have a knowledgeable staff available to help over the phone, via email or by live chat.Read more: Delaware company formation Delaware merchant services

Delaware Corporation vs LLC

Comparison 2 types of company Corporation vs LLC in Delaware, USA: L.L.C Company Corporation Company Governance structure All members are bound by an operating agreement. The operating agreement determines all issues in the company. The members may manage the company themselves or they may hire an external manager. There are 3 tiers of power: Shareholders – own the company Directors – manage the major business actions Officers – carry out day-to-day business activities Federal taxation IRS considers a single-member LLC to be a disregarded entity and a multi-member LLC to be a partnership. The entity/partnership must fill in a Federal Tax ID number (also called an employer identification number or EIN). IRS taxes in 3 different ways: C-corporation – pays taxes on profits each year and may choose to distribute dividends to shareholders. If the shareholders are a small, tight-knit group, this is often referred to as double taxation. S-corporation – the tax liability on the profits and losses of the company are passed through to the shareholders. They must pay the taxes. Tax exempt – the company must file IRS Form 1023 and qualify for tax-exempt status by engaging in a qualifying charitable, religious or public-service purpose. Privacy No annual report required Annual report must state: the corporation’s physical address all directors’ names and addresses one officer’s name and address Read more: Company register Delaware Delaware general corporation

Complete Delaware Company Kit package includes

L.L.C Company Corporation Company Apostille Certified Copy of Certificate of Formation Notarized Statement of Authorized Person Digital Corporate Seal Apostille Certified Copy of Certificate of Incorporation Notarized Statement of Incorporator Articles of Incorporation (BY-LAWS) Digital Corporate Seal Hard-copy of documents will be delivered to client’s registered / mailing address without courier fee charged.Read more: Best state to incorporate LLC Why do companies incorporate in Delaware

Why form an LLC in Delaware, USA?

A Delaware LLC (Delaware limited liability company) is a type of business entity that is created by filing the proper certificate of formation with the Delaware Secretary of State.So why form a Delaware LLC? The Delaware LLC is a truly unique business format in that the structure of the company and the rules that govern its members are contained in a contract called an operating agreement, which is drafted by the company's members (owners). In drafting the operating agreement, you have what lawyers call ‘freedom of contract’, which means that, as the owner, you have the freedom to tailor the terms and rules of your LLC to accommodate your specific business needs. Once signed and agreed to by all parties, the operating agreement is legal and enforceable by all parties.When you form your Delaware LLC through OffShore Company Corp, our corporate kit, which is included in both the standard and premium packages, will provide you with an operating agreement to customise to your specific business needs.Read more: How to set up a Delaware company Offshore Delaware company

How to incorporate business in Delaware?

Step 1: Choose your unique business name

Selecting a name that aligns with your Delaware business incorporation services, products and message, including an identifier, such as Inc. or LLC.
After that, doing a state name check in case your desired name is already taken in Delaware.

Step 2: Recruit and/or appoint members/managers (LLCs) or directors (corporations)

LLC requirements:

Delaware requires LLCs to have one or more members/managers
Delaware does not specify age requirements of members/managers
Delaware does not specify where members/managers must reside
Delaware does not require member/manager names and addresses to be listed in the Certificate of Formation.

Corporation requirements:

Delaware requires a corporation to have one or more directors
Delaware does not specify age requirements
Delaware does not specify where directors must reside
Delaware does not require director names and addresses to be listed in the Certificate of Incorporation.

Step 3: Appoint a registered agent

Every Delaware corporation must have an agent in the state for the process of service and receiving legal documents. The registered agent may be (1) an individual Delaware resident, or (2) a business entity authorized to do business in Delaware.

The registered agent must have a physical street address in Delaware. However, if your corporation has a representative office physically located in Delaware, it may act as its own registered agent.

Step 4: Prepare and file the Certificate of Incorporation/Formation

A Certificate of Incorporation for corporations or Certificate of Formation for LLCs needs to be filed with the Department of State. Here’s what the Certificate of Incorporation normally includes:

The corporation name
The corporation’s mailing address and street address
The corporation's Registered Agent and their address
The corporation’s capital structure (number of shares to be issued, who owns them, pricing, etc.)
The name and address of the incorporator.

Step 5: File annual report and franchise tax

Delaware requires corporations to file an Annual Franchise Tax Report. The due date for corporations is March 1. For LLCs, Delaware requires to file an Annual Franchise Tax Statement by June 1.

Step 6: Obtain required business licenses/permits

Most small businesses, including sole proprietorships, need a combination of licenses and permits from both federal and state agencies to operate legally and meet government standards.

Step 7: Comply with other tax and regulatory requirements

Other tax and regulatory obligations you should consider for your corporation or LLC include obtaining a Federal tax identification number (EIN).

Step 8: Open a bank account for your business

Open a business account when you're ready to start accepting or spending money for your LLC or corporation. You will most likely need an EIN and your incorporation paperwork.

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