Delaware LLC structure and cost: series, anonymity, transfer tax, and state tax

Three of the four sections on this page get written about constantly. The fourth barely gets mentioned, and it decides the biggest number on most deals.

Delaware charges $300 a year to keep an LLC alive. It charges up to 4 percent of value to move a building into one. Everybody knows the first number. Almost nobody prices the second until the bill arrives.

Where a Delaware LLC actually lives

A Delaware LLC is a Delaware entity for questions about its own insides. Who votes, what managers owe, what the agreement can override. That is the internal affairs doctrine, and it is the real reason Delaware formation is worth something to a company with investors in six states.

It does not follow that Delaware law governs everything else about the company.

Where the company does business, that state’s law generally decides whether it has to register there, what taxes it owes, and often what a creditor can do to it. Registering as a foreign LLC where you operate is not a formality that preserves Delaware’s advantages. It is the moment the other state’s rules attach.

A Delaware LLC that owns one building in another state and does nothing in Delaware has bought Delaware governance law, a $300 annual bill, and a registered agent fee. For a single-owner rental, that is usually a bad trade.

The creditor-side version of this, including a 2024 federal decision that declined to apply Delaware’s charging order statute to a Delaware LLC, is on the protection page.

Delaware imposes no newspaper publication requirement, which some states do and which can cost more than the filing.

Delaware has three kinds of series, and one of them shields nothing

Delaware invented the series LLC. It now runs two working versions and a third category that exists in the statute and does no protective work at all.

A protected series is set up in the operating agreement with no filing. Its wall needs three things: the records for that series keep its assets separate from the company’s other assets and from other series, the agreement provides for series, and the certificate of formation gives notice of the limitation on liabilities.

Meet all three and the debts of one series reach only that series’ assets. Unless the agreement says otherwise, it runs the other way too.

Source: 6 Del. C. § 18-215(b).

A registered series is formed by filing a certificate with the Secretary of State. Same wall, same three conditions. Its name has to begin with the company’s name.

Source: 6 Del. C. § 18-218.

A series that is neither. The Act defines a series to include one that is neither protected nor registered, and a 2026 amendment builds on that category directly.

Writing the word “series” into your agreement does not create a shield. The shield comes from meeting the three conditions or filing the certificate. A series that does neither is still a series, with no wall around it at all.

The registered series exists to solve a lender’s problem

The 2019 amendments that created registered series were not about asset protection. They were about getting a loan.

A protected series is not a registered organization under Article 9 of the UCC, so a secured lender cannot cleanly perfect a security interest in its assets. The amendments made a registered series a registered organization located in Delaware for Article 9, with matching UCC changes, and gave it the ability to get certificates of good standing.

If an asset in the series will ever be financed, it belongs in a registered series. Asset protection and financeability pull opposite directions here, and the choice is made at formation, before anyone is thinking about a loan.

Someone who set up protected series for separation and later goes to borrow against one finds the lender either unable to perfect or unwilling to try. And the cost is real: each registered series carries its own annual tax on top of the $300. Ten registered series is ten extra payments.

One protection worth knowing: a series is not liable for the company’s debts or another series’ debts just because someone missed an annual tax payment or lost good standing. One missed $75 payment does not collapse the other nine walls.

Source: 6 Del. C. § 18-1107.

Your name is not on the filing. It is on the qualification.

Delaware is one of the states people mean when they say anonymous LLC. The certificate of formation has to state two things: the company’s name, and the registered agent’s name and Delaware address. Members and managers are not on it, and the Division of Corporations does not collect that information.

Source: 6 Del. C. § 18-201(a).

Delaware LLCs file no annual report, so no later filing surfaces ownership either. The annual tax payment does not ask.

What it does not buy

Three limits, and the third is the one that matters.

The registered agent keeps a communications contact for the company. That record answers a subpoena in litigation and a government investigation. Anonymity here is privacy from a casual search, not from legal process.

If the company is its own registered agent, which Delaware allows when it keeps a Delaware office, the public record shows the company’s Delaware address. If an individual Delaware resident serves, that person’s name is on the record. The anonymity story assumes a commercial agent standing in the gap.

And the shield does not travel.

When the company registers where it actually operates, that state’s disclosure rules apply, and plenty of states want members or managers named. A Delaware LLC doing business in a disclosure state has no anonymity where it does business. It has anonymity in the one state where it does nothing.

Anyone who chose Delaware for privacy while operating elsewhere bought a shield pointed at the wrong jurisdiction.

Federal reporting, as it stands now

Domestic entities are currently exempt from beneficial ownership reporting under the Corporate Transparency Act. A FinCEN interim rule from March 26, 2025 redefined “reporting company” to mean only entities formed under foreign law and registered to do business in a U.S. state. The entities formerly called domestic reporting companies do not report.

That is today’s rule and it is not settled. It arrived as an interim rule rather than a repeal, a final rule went to review in June 2026, and a federal watchdog found in May 2026 that the change dropped more than 99 percent of covered entities and told Treasury to address the gap.

Keep your beneficial ownership records current regardless. Banks and investors ask for them whether or not FinCEN does. Last verified July 2026.

Delaware is the cheapest state to form in and one of the most expensive to move a building into

Now the section that does not appear on the other Delaware pages.

Delaware’s realty transfer tax is 3 percent of value. Where the county or town has enacted its full 1.5 percent, the state rate steps down to 2.5 and the combined bite is 4 percent, reported as the highest state-level transfer tax in the country.

The tax splits equally between buyer and seller by statute, and absent agreement the burden falls on the grantor. No tax under $100 of value. First-time home buyers get a break.

Source: 30 Del. C. §§ 5402(a), (b), (c), 5412.

On a $5 million property, 4 percent is $200,000. Delaware’s annual tax is $300. The transfer tax is 666 years of franchise tax, landing on one day, and it is not the number anyone puts in the comparison chart.

Value is not always price

Where a transfer runs below the highest appraised value used for local property tax, “value” means that appraised value, unless a party shows fair market value is lower. Showing the deal was at arm’s length between unrelated parties is enough to establish fair market value.

Source: 30 Del. C. § 5401(4).

A contribution to your own entity is by definition not at arm’s length, so there is no arm’s-length showing available and the assessment controls unless you prove otherwise.

Putting the property in is exempt

There is an exemption for a conveyance to or from an entity where the grantor or grantee owns an equity interest in that entity in the same proportion as their interest in the real estate.

The statute says “entity” and “equity interest.” It reaches LLCs.

Source: 30 Del. C. § 5401(1)n.

There is a carve-out for a distribution in liquidation, unless the interest was held more than three years. And conveyances between a parent and a wholly owned subsidiary without consideration are exempt, as are conveyances between spouses, parent and child, and siblings.

The door opens one way

Delaware taxes transfers of beneficial ownership in real estate done through conveyances of intangible interests, mergers and indirect exchanges included, in a corporation, LLC, partnership, or trust. Selling the company instead of the deed does not dodge the tax.

Source: 30 Del. C. § 5401(8)a.

Where the people who owned the real estate before the transfer still hold 80 percent or more afterward, no tax. Below 80 percent, still no tax, unless the Secretary of Finance’s regulations characterize it as a sale, weighing timing, ownership before and after, and business purpose.

So 80 percent is a safe harbor, not a cliff. Drop below it and you move from a flat exemption into a facts-and-circumstances test.

Here is the part that decides deals. The controlling-interest tax picks up the exemptions in the definition section, except two. One of the two it excludes is the identical-ownership exemption.

The exemption that made your contribution free is expressly unavailable when you later change who owns the entity. Delaware built a one-way door. Entry is free. Rearranging the room is not.

An owner deeds a building into a wholly owned LLC and pays nothing, correctly. Years later that owner brings in a partner, recapitalizes, or merges the company, reaches for the same exemption on the theory that nothing changed at the property, and it is not there. The legislature pulled it out of the intangible-transfer provision by name.

Which turns deal sequence into a structuring decision. Contribute first, admit the partner second, and the steps get analyzed separately. Do both in one move and you risk turning an exempt contribution into a taxable one, because the proportions no longer match at the moment of the conveyance. A sponsor selling 25 percent has dropped below the safe harbor. The same economics structured to leave the original owners at 80 percent or above has not.

Build within a year and the contract itself is taxed

This one is not in the commercial writeups at all.

A contract to construct all or part of a building is a taxable document if it is entered into, or labor or materials supplied, before the land transfer or within one year after it. The rate is 2 percent on amounts over $10,000, paid by the building’s owner. Buildings that are 85 percent or more manufacturing space are exempt.

It is enforced at the permit counter. No building permit issues unless the applicant shows no transfer in the past year, or that the contract fell outside the one-year window, or that the tax was paid. No certificate of occupancy issues until the owner recertifies actual cost and pays any balance.

Source: 30 Del. C. §§ 5401(9), 5402(f).

Buy land in Delaware, build within a year, and the construction contract is taxed at 2 percent over $10,000. On a $4 million build that is roughly $80,000, collected by withholding your permit and then your certificate of occupancy.

The one-year window runs from the transfer, so the timing of land acquisition against the construction contract is a real planning variable. Older guidance says 1 percent, which it was in 2010. Anyone working from a stale source is off by half.

A five-year lease with a renewal option is not a five-year lease

A writing that transfers a possessory interest for more than five years in a condominium or Unit Property Act unit, and an assignment of a residential leasehold over five years, are taxable documents. In figuring the term, the statute presumes every renewal or extension option gets exercised.

Source: 30 Del. C. §§ 5401(5), (6).

An option the tenant may never use can pull the lease across the five-year line. Tax is paid on the first year’s consideration at signing and annually after.

Disregarded does not mean invisible. It means the bill moves up.

A pass-through entity is not itself subject to Delaware income tax. Members are liable in their own capacities.

But the incidence of business license and excise taxes falls on the pass-through entity doing business in Delaware, not on its members.

Source: 30 Del. C. § 1621(a), (b).

A nonresident member counts as Delaware source income their share of the entity’s Delaware-source items, as if they earned them directly. Delaware classification always follows federal, with no separate state election for an LLC.

Source: 30 Del. C. § 1622.

What “no Delaware taxes” actually means

An LLC that does not operate in Delaware and has no Delaware source income owes the annual tax and nothing else. That is the true version of the claim, and the conditions are the whole sentence.

An LLC that does operate in Delaware faces gross receipts tax on in-state revenue, at rates that vary by activity, and its members face Delaware income tax on Delaware source income.

The regulation that catches corporate parents

A Delaware regulation puts the single member of a non-electing LLC doing business in Delaware on the hook for Title 30 filing every year the company operates there. Where that single member is a corporation, it has to file a Delaware corporate return and get a business license.

A corporate parent that drops a Delaware operating business into a single-member LLC has not insulated itself from Delaware filing. It has taken the obligation on directly.

The entity built to be ignored for tax purposes is ignored precisely enough to hand its filing duty to its owner. And the gross receipts tax runs the other way and does not move up: § 1621(b) puts excise and license tax on the entity itself, so the LLC pays it even though the LLC pays no income tax. A structure built on everything flowing through to the members has one line item that does not.

Filing for nonresident members

An LLC taxed as a partnership files the Delaware partnership return by the fifteenth day of the third month after the tax year closes. A nonresident member files a nonresident return for their Delaware-source share, or joins a composite return.

The composite return is convenience bought at the top rate. It computes tax at a flat 6.60 percent and allows no net operating losses.

For a syndication with many small nonresident investors, filing composite is usually right, because nobody wants a Delaware return for a four-figure allocation. For a sponsor or a large holder it is the expensive choice, which makes it a question for the operating agreement, not for whoever prepares the return in April.

Entity variants

Delaware permits professional limited liability companies, and forms a statutory trust for $500, the vehicle behind Delaware statutory trust interests used in exchange structuring.

The covered professions for a PLLC, and Delaware’s treatment of low profit and benefit LLCs, are not yet verified to the standard the rest of this page uses. That section arrives when it is.

The bottom line

Delaware is cheap to form and expensive to fund. $300 a year, and up to 4 percent to move a building in. On a $5 million property that is $200,000 nobody put in the comparison chart.

The contribution is free. The restructuring is not. The exemption that makes deeding property into your own LLC tax-free is carved out of the tax on changing who owns the LLC. Contribute first, admit second.

Build within a year and the contract is taxed. 2 percent over $10,000, collected by withholding your permit, and missing from every commercial writeup.

Three kinds of series, and naming one is not creating one. The shield comes from meeting the conditions or filing, and anything you will finance belongs in a registered series.

Anonymity points at the wrong state. Delaware hides you where you do nothing and exposes you where you operate.

Disregarded moves the bill up, not away. A corporate parent over a single-member Delaware operating LLC files in Delaware directly, and the gross receipts tax never flows through at all.

What this page does not cover

How a creditor reaches a member’s interest, veil piercing, trusts, and exemptions are on the protection page.

What the statute decides when the agreement is silent, and how far the agreement can go, is on the governance page.

Forms, fees, and deadlines are on the filing page.

Last verified July 2026.