Small Business Reading Room

Friday, July 22, 2005

The Delaware Series LLC- new identification available from the Division of Corporations

The Delaware series LLC is a variation of a traditional LLC that under The Delaware Limited Liability Company Act § 18-215, can provide for the establishment of 1 or more designated series of members, managers or limited liability company interests having separate rights, powers or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations, and any such series may have a separate business purpose or investment objective.

In plain English, the series LLC allows for multiple assets to be owned by one LLC, but permits those assets to be separated into different "series" within that LLC. It allows for the convenience and flexibility of maintaining only one LLC, and at the same time when properly structured, can hold many separate assets under one umbrella.

There are things you need to make sure you do in order to maximize your chances of keeping all of your assets and any liabilities associated with those assets separate from one another, so it is a good idea to talk to an attorney about making sure you structure things properly if you are not confident in your own research abilities. Remember, you can always contact us for a referral if you need one.

This past week, something significant has occurred at the Delaware Division of Corporations. Specifically, they have announced that data is now being used to identify and distinguish a series LLC from a regular LLC filing.

For any series LLC that has been filed with the Division of Corporations starting on 7/19/05, there is a new data entry field to indicate that the LLC is in fact a series LLC. Because of this, it is possible to obtain a certificate of good standing (long or short form, a certified copy of a conversion to a series LLC, or a certified copy of the filing history for a series LLC that will identify the LLC as a series LLC!

Here is what the actual language on the above certificates will look like:


This is big news.

Before, although the series LLC had to be identified as such per § 18-215 of The Delaware Limited Liability Company Act on it's certificate of formation, there was no other indication in any other location that the LLC was in fact a series LLC.

At this time, regular certified copies will not be able to include this language.
Also, there is no indication of what is available (if anything) for a series LLC that was filed prior to 7/19/05.

We'll keep you posted on any new developments!

Wednesday, July 20, 2005

Delaware Businesses Receive Tax Break from House Bill 303

There is now yet another good reason to do business in Delaware.

Yesterday, Governor Ruth Anne Minner signed House Bill 303 which reduced the amount of gross receipts tax for businesses operating within the state.

Most businesses that pay the tax will see a reduction of 20 percent. Auto manufacturers will see a slightly better brake at 25 percent.

In addition, about 1,200 small businesses will no longer be subject to the gross receipts because the amount a business must bring in to owe the tax will increase from $50,000 to $80,000 a month.

This is good news for both small businesses and the corporate giants who call Delaware home.

Monday, July 18, 2005

Credit Card Tips for Small Businesses

What do small businesses and college students have in common? Credit card debt.

According to an article in The News Journal, increasingly small businesses are turning to credit cards, whether its to help them keep track of their expenses or because they don't think they can get a small business loan. Unfortunately, some of these small businesses are finding themselves more and more in credit card debt.

According to Barbara Necarsulmer, associate state director of the Delaware Small Business Development Center, "Small-business owners often get into debt trouble because they underestimate how much money it will cost to run the business and they overestimate how quickly the business will become profitable. The credit card is a tempting way to handle an unanticipated shortfall."

So, what steps do they recommend to combat the credit card debt?

  • One of their first suggestions is to shop around for the best deal. In today's world, a credit card is almost a necessity. And because of this, there are a number of credit card companies to choose from. This means lower interest rates and rewards programs.
  • Research and plan accordingly. As mentioned above, entrepreneurs are often incorrect in their first financial estimates. Small-business owners should research their industry and find out how much it will cost to run their business. Then, they need to find the resources to cover the costs, whether its from a small business loan or savings.
  • Research the availability of loans in your area. Many entrepreneurs don't think that a loan is an option for them. However, this is not the case. There are loans available through a number of resources. In Delaware for example, one could call the U.S. Small Business Administration's Delaware District Office at 302-573-6294. Or, First State Community Loan Fund at 302-652-6774.

Credit card debt is no way to start your business. Take it from someone still struggling to get out of the credit card debt racked up in college...


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Delaware Intercorp, Inc.
113 Barksdale Professional center
Newark, DE 19711-3258

"For all the best reasons to incorporate,the best place
is Delaware and the best incorporator is
Delaware Intercorp!"

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