Incorporating in Delaware

Delaware LLC

Delaware LLC law was passed in 1991.

Number of members in Delaware LLC: Delaware LLC’s require at least one member to organizer to be incorporated. To obtain the tax benefit of a Delaware LLC however, it is recommended to form the LLC with two members or more.

Asset management and putting finances in order to plan your future requires pursuing different measures to increase wealth while protecting it. One of the measures that we have introduced clients to is dual nationality. It is smart to think of the possibility of owning a second passport or at least residency in a second country since one cannot tell what the future has in store. Citizenship-by-investment programs enable families and investors to increase wealth and plan estate. We also form offshore trusts and offshore foundations which safeguard wealth.

It is also important to note that a non-resident corporation that is a member of a Delaware LLC could be considered a branch or a US foreign company by the IRS and may as a result be subject to taxation on international income. Due to this, it is better that the members of a Delaware LLC are natural persons, and not corporate entities.

Capitalization: Delaware LLC is owned by members who contribute towards capital. These capital contributions are not categorized as shares and consequently.

Shareholders: Due to the capital structure of a Delaware LLC, the persons belonging to this entity are not considered shareholders and are called members.

Membership: The members of a Delaware LLC can be nationals of any country who do not live in the United States provided that they satisfy the prerequisites for LLC incorporation in Delaware.

As well as natural persons, corporations, trusts and partnerships can be the owners of a Delaware LLC. Tax liability must, however, be carefully revised.

No maximum limit is stated for the number of members that a Delaware LLC can have.

Legal Status: Delaware limited liability companies (LLC) are legal entities that are separate from their members. Delaware LLC’s are recognized and accepted worldwide as corporate trading entities.

Liability: As the name suggests, a Delaware LLC is a company with limited liability. This type of offshore company thus protects the personal assets from any loss that may be incurred by the company.

The liability of the members of a Delaware LLC is limited to their investment in the company.

Taxation: Delaware LLC that operates and generates its income outside the United States is not subject to paying taxes in the US.

On the contrary, if a Delaware LLC operates in the US, it becomes subject to taxation which is imposed on a pass-through basis and not on profits. The members are therefore taxed on personal income.

Tax returns are not required to be filed to US authorities if the Delaware LLC owned solely by nonresident aliens.

Tax exemption is guaranteed to an offshore Delaware LLC provided that all active business and trading activities are done outside the US, that permanent employees do not reside in or operate from an office in the US, and that all members are nonresidents and non nationals of the US.

Management: Delaware LLC’s can be managed by their members. Or, someone can be hired to manage. The membership requirement of a Delaware LLC does not call for a board of directors.

An Operating Agreement is typically written and signed by the members of a Delaware LLC so that matters pertaining to managements, member duties and powers, ownership, duration, voting rights etc. can be decided and agreed upon in a legally binding contract.

Annual General Meetings: Delaware LLC offshore is not compelled by law to hold annual general meetings or to keep records. If there are members who are residents of the United States, an annual report stating the distribution of profits by the Delaware LLC to these residents must be filed.

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