Delaware vs New York LLC
Side-by-side comparison of forming an LLC in Delaware vs New York — fees, processing times, taxes, and decision factors to help you choose the right state for your business.
Lower state fees:
New York — $209 total 1st-year state fees
Excludes franchise tax, registered agent, and other compliance costs
Pros and Cons
Pros
- Most developed LLC/corporate case law in the US
- Court of Chancery resolves business disputes faster than any other state
- No state income tax on LLCs not doing Delaware business
- Preferred by VCs and institutional investors
- Strong privacy — member names not required on public filings
Cons
- $300 annual franchise tax regardless of revenue
- Foreign qualification required in your home state if operating elsewhere
- Annual registered agent fee ~$100-$300
Pros
- Largest economy in the country with access to Wall Street capital
- Strong B2B ecosystem
- Major global city for many industries
Cons
- Publication requirement: 6 weeks in 2 newspapers ($500-$2,000 depending on county)
- NYC Unincorporated Business Tax (UBT) above $100K
- High state income tax (4%-10.9% + NYC 3.876%)
- Costly for small businesses at formation
Side-by-Side Comparison
| Feature | Delaware | New York |
|---|---|---|
| LLC filing fee | $90 | $200 |
| Corporation filing fee | $89 | $125 |
| Annual report fee | $300 | $9 |
| Processing time | 3–5 days | 7–15 days |
| State income tax | None on out-of-state income for pass-through LLCs | 4%-10.9% state + NYC 3.876% |
| Franchise / entity tax | $300 flat annual franchise tax | Biennial Statement of Information, $9 |
| Popular formation state? | Yes | Yes |
Which Should You Choose?
• Ideal for VC-backed startups and multi-state operations
• Overkill for single-state small businesses
• You live or operate primarily in Delaware — forming locally avoids foreign qualification costs and compliance in multiple states.
• Publication requirement alone can cost $2,000+ in NYC
• Better to form in home state and foreign qualify if needed
• You live or operate primarily in New York — forming locally avoids foreign qualification costs and compliance in multiple states.
FAQ
Is it cheaper to form an LLC in Delaware or New York?
Delaware charges $90 filing + $300 annual report. New York charges $200 filing + $9 annual report. New York is the cheaper option on state fees alone, though franchise tax and other compliance costs also matter.
Should I form my LLC in Delaware or New York?
For most businesses, form in the state where you actually operate. Delaware (None on out-of-state income for pass-through LLCs state income tax) and New York (4%-10.9% state + NYC 3.876% state income tax) each have their specific characteristics. If you physically operate in one of these states, form there. Forming in Delaware while operating in New York (or vice versa) means paying fees in both states.
Can I form my LLC in Delaware and operate in New York?
Yes, but you'll need to "foreign qualify" in New York, which means paying a registration fee in New York plus ongoing compliance in both states. You'll also typically owe New York state taxes on income earned there regardless of where the LLC is formed. Forming in a single state (usually your home state) is typically cleaner and cheaper for small businesses.
What are the annual costs for an LLC in Delaware vs New York?
Delaware: $300 flat annual franchise tax — plus $100-$300/yr for a registered agent. New York: Biennial Statement of Information, $9 — plus $100-$300/yr for a registered agent. Budget an additional $500-$2,000/yr for accounting, bookkeeping, and business license renewals regardless of state.
Which state has better asset protection — Delaware or New York?
Asset protection varies by state statute. States like Wyoming, Nevada, and Delaware have the strongest charging-order-exclusive doctrines for LLC members. Delaware and New York both offer LLC liability protection, but consult an attorney for state-specific asset protection planning if you have significant personal assets to shield.
Ready to form your LLC?
FormifyAI files your Articles of Organization in any US state. EIN, operating agreement, BOI report, and registered agent included. Starting at $39/month with annual billing.