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

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

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

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

What is a Delaware limited liability company (LLC)?

Delaware LLCAn LLC is a relatively new type of entity in the United States. If properly structured, it combines the limited liability of a corporation with the pass-through taxation of a partnership. However, it is important to clarify that while LLCs can be treated as partnerships, they are not corporations.An LLC is a business vehicle with a legal existence separate and distinct from its owners. Owners and managers are not personally liable for the company's debts and obligations. These features, when combined with non-U.S. source income, mean non-resident aliens of the United States can avoid U.S. taxation when using an LLC.Read more: Delaware LLC formation requirementsLLC Operating AgreementThe operations and management of an LLC are governed by a written agreement, composed by its owners, called an LLC Operating Agreement. The Delaware Limited Liability Company Act allows the parties to define their operations, management and business relationship in the LLC Operating Agreement. This is known as freedom of contract.An LLC guarantees secure confidentiality as well as the ability to create a customized management structure that establishes the economic relationship among owners. The LLC Operating Agreement can be written in any language and is typically not required to be translated into English.How to Manage an LLCWhile the Delaware LLC law permits a Delaware LLC to be managed by its members, it does not require members to be managers. More importantly, the law also states that no member or manager is personally responsible for any debts, obligations or liabilities of the Delaware LLC solely by being a member or acting as a manager.Read more: Delaware Corporation vs LLC Delaware corporate registry

Delaware Corporation vs LLC | Offshore Company Corp

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

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

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Delaware Corporation vs LLC

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