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Read this *before* opening an LLC in Delaware

Sure, it sounds like a good idea, but there are some *huge* caveats.

If you're reading this, congrats; you're think about protecting your personal assets with a limited liability company! Smart decision.

And you're also thinking about opening one in Delaware for its pro-business policies and tax purposes.

And it's so easy to open one with all of the registered agent websites.

But hold up! It's not as good as it sounds.

None of the agents advertise the following until you purchase from them:

  1. Most important, you still owe taxes to your home state. This one might be obvious to you. (If it is, great! But keep reading.)
  2. You will have to register your LLC in each state you operate in. For example, if I opened an LLC in Delaware but wanted to operate in Massachusetts, I would owe Massachusetts $500 to have the same asset protection! Ouch.
  3. Delaware imposes a $300 annual fee called a "Franchise Tax" even if you make no money through the LLC. It's due on June 1st of the following tax year.
  4. If you decide to dissolve your LLC, it's another $200. And you still have to pay the franchise tax for the current tax year. That's $500 just to call it quits.

All in all, if you open an LLC in Delaware but later decide it was a bad idea, you're about $850-1000 in the hole.

Delaware is a fantastic, underrated state, but do some more homework before you decide to open a business there, especially if you're far from generating income.

How do I know all of this? Canceled my order just in time.

25. From Pennsylvania, USA. Software engineer at, traveler, scuba divemaster, amateur photographer, aspiring minimalist. A bit restless.

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