How to Start a Delaware LLP — Step by Step

An LLP is a partnership first and a registered entity second, so the work starts before any state form. The partners need to agree on how the business will operate: who the partners are, what each contributes, how profits and losses are split, how decisions are made, and how a partner joins or leaves. This is the substance of your partnership agreement, and it should exist before you register.

Delaware treats a partnership as formed when two or more people carry on a business as co-owners for profit — the agreement can even be oral. But relying on defaults and handshakes is exactly what causes disputes later. Putting the terms in writing now, while everyone agrees, is far cheaper than sorting it out after money is involved.

Decisions to settle first

• Who the partners are and what percentage each holds
• Capital each partner contributes at the start
• How profits, losses, and distributions are allocated
• How major decisions are made and what requires unanimous consent
• How partners are admitted, and how a departing or deceased partner's interest is handled

For a professional firm, this is also the moment to confirm that your state licensing board permits an LLP for your profession and that ownership is limited to appropriately licensed individuals if your rules require it.

Your LLP's name has to be distinguishable from every other entity already on file with the Delaware Division of Corporations, and it must carry the correct designator. Search proposed names and close variants through the Division's name availability search before you commit to signage, a domain, or letterhead.

Naming rules for a Delaware LLP

• The name must include "Limited Liability Partnership," "L.L.P.," or "LLP"
• It must be distinguishable from names already registered in Delaware
• Restricted words — those implying banking, insurance, or a government agency — may require additional approval or be disallowed
• Professional firms may face additional naming conventions from their licensing board

Reserving the name

If you have your name but are not ready to file, Delaware lets you reserve it for a set period through the Division of Corporations so no one else takes it while you finish the rest of the setup. Reservation holds the name; it does not register the LLP.

The Statement of Qualification requires you to name a registered agent with a physical Delaware street address, so this has to be settled before you file. The agent is where lawsuits and official state notices are delivered, and it must be a real address staffed during business hours — not a P.O. box.

Who can serve

• A partner with a Delaware street address who is reliably available during business hours; note this puts a personal address in the public record
• A commercial registered agent authorized in Delaware, which supplies a professional address, is always available to accept documents, and forwards them to you

Because so many Delaware LLPs have no physical presence in the state, a commercial registered agent is the practical choice for most out-of-state firms. It also keeps a partner's home address out of Delaware's public entity database.

The Statement of Qualification is the filing that turns your general partnership into a registered Delaware LLP and switches on the liability shield. You file it with the Delaware Department of State, Division of Corporations. Delaware's alternative-entity forms and instructions are published through the Division of Corporations, and the partnership tax instructions live on the alternative-entity tax page.

What the Statement of Qualification includes

• Partnership name with the required LLP designator
• Address of the principal office
• Registered agent name and Delaware street address
• Number of partners, which determines the annual tax
• A statement electing limited liability partnership status under the Delaware Revised Uniform Partnership Act

Processing

Standard processing generally runs about ten business days, with expedited tiers available for an added state charge if you are on a deadline. Once the Statement is recorded, the LLP is effective and appears in Delaware's entity records. Keep the filed document — banks and counterparties will ask for proof that the LLP exists.

With the registration filed, formalize the internal rules you settled in Step 1 into a written partnership agreement. Delaware does not require you to file it, and it never becomes public — but it is the document that actually governs the partnership. Without it, the default rules of the Delaware Revised Uniform Partnership Act fill every gap, and those defaults may not match what the partners intended.

What a complete partnership agreement covers

• Partner names, capital contributions, and ownership percentages
• How profits, losses, and distributions are allocated
• Voting rights and which decisions require unanimity
• How new partners are admitted and how departing partners are bought out
• What happens on a partner's death, withdrawal, or incapacity
• How the LLP is dissolved and its assets distributed

For a professional LLP, the agreement should also address how the firm handles a partner who loses their license and how malpractice exposure is allocated. This is where a business attorney earns their fee.

A partnership needs an Employer Identification Number — a nine-digit federal tax ID — because a multi-owner partnership must file its own federal return. The EIN is free from the IRS and is required to open a bank account, hire employees, and file the partnership's taxes.

How to apply

Head to the IRS EIN Assistant online at IRS.gov and complete the request there. Expect about ten minutes to finish, with the number granted right away so you can print the confirmation and put it to work that same day. The online application requires a responsible party with a US Social Security number or ITIN. Partners without one can apply by fax or mail using Form SS-4.

An LLP is taxed as a partnership by default: it files Form 1065 and issues each partner a Schedule K-1, and the income flows through to the partners' individual returns. There is no separate LLP-level federal income tax under the default treatment.

Keep the partnership's money separate from the partners' personal finances. Commingling funds undermines the very separateness the LLP relies on, so open a dedicated business account before you start transacting.

What banks typically ask for

• The filed Statement of Qualification
• The IRS EIN confirmation
• The partnership agreement
• Identification for the authorized partners

Ongoing compliance

Delaware's headline ongoing obligation for an LLP is the annual tax, due June 1 each year and administered by the Division of Corporations through its alternative-entity tax system. The amount tracks the number of partners. Keep the registered agent current, keep the state's record accurate, and pay the annual tax on time — that is what keeps the LLP in good standing and the liability shield intact. Federally, file Form 1065 each year and issue K-1s to the partners.