State Laws -- Delaware Limited Liability Companies June 11, 2004 Stephanie Eidolon Delaware Limited Liability Companies are subject to both federal and state regulations, and are here discussed in the latter sense. Each state has the right to impose its own laws on LLCs. Delaware is no different. As a matter of fact, a Delaware limited liability company may very well be more heavily regulated than another state's. It is simply a matter of how you go about setting up your LLC, and, indeed, whether you want to apply for recognition as a partnership or as a corporation.

Limited Liability Companies -- Rules And Regulations

Delaware LLCs are subject to three different classifications: a non-electing single member LLC, an electing LLC, and a non-electing multiple member LLC. This means that there are LLCs with more than one person in charge, or just one person taking the lion's share of the profits. There are, of course, guidelines and regulations for this. The Delaware laws for LLCs center mostly around taxes, which ensures that the state receives its fair share of the revenues.

You must also realize that the LLC is not immmortal. When one or more of the players in the game is unable to continue, whether for unexpected death or bankruptcy, then the business, too, dies. This is called "Limited Life." Second, you need to realize that this may be quite a complex process -- moreso than for a corporation.

Failure to comply with the procedure for filing your articles of organization will most certainly delay the formation of your company -- and, what's more, it will make your attempts at pulling together an LLC even more difficult. In order to understand how to do this properly, speak to a legal advisor.

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