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?For most business owners, forming their LLC in Delaware will not offer many benefits. It instead ends up being an unnecessary and often expensive step.? That extra step of registering as a foreign entity costs valuable time and additional filing fees?both upfront and on an ongoing basis.

Delaware LLCs put up a barrier between personal assets and business liabilities. Business owners are protected from their business creditors. Delaware's ?Charging Order? prevents the creditors of an LLC from taking over the company.

I'm not a Delaware resident and don't have a physical address in Delaware. Can I still form an LLC in Delaware? Yes, a non-resident with no physical address in Delaware can form a Delaware LLC. The State of Delaware only requires the company to have a Registered Agent in Delaware.

It offers three big advantages for out-of-state businesses organized as Delaware LLCs: No income tax if the LLC doesn't do business in Delaware, though LLCs must pay $300 annually for the Delaware LLC franchise tax. No sales tax if the LLC doesn't do business in the state.

No sales tax if the LLC doesn't do business in the state. No tax on intangible income, like trademark royalties, making Delaware an excellent choice for holding companies that own intellectual property.

No Real Tax Savings Ultimately, that means you could pay more taxes by incorporating in Delaware rather than your home state. For example, you'll pay both your home state's taxes and applicable Delaware taxes. Paying taxes in two states will likely offset any savings you'd get from forming your LLC in Delaware.