Side-by-side comparison of Limited Liability Company and Sole Proprietorship for Delaware businesses. See costs, tax treatment, and which structure fits your situation.
| Feature | LLC | Sole Prop |
|---|---|---|
| Filing fee (Delaware) | $90 | $0 |
| Annual fee | $300/yr | $0/yr |
| Liability protection | Yes | No |
| Self-employment tax | On all profit | On all profit |
| Formation complexity | low | none |
| Ongoing complexity | low | none |
| Can raise funding | Limited | Limited |
Pros
Cons
Pros
Cons
⚠$300 annual LLC tax
⚠Corp franchise tax can be high for large companies (based on authorized shares)
⚠If you don't live in Delaware, you'll also need to register in your home state as a foreign entity
Our free quiz calculates your actual tax burden under each entity type based on your income and Delaware tax rates.
Take the QuizLimited Liability Company: Liability protection with pass-through taxation. The most popular choice for small businesses. Sole Proprietorship: The simplest structure. You and your business are the same legal entity. In Delaware, LLC filing costs $90 and Sole Prop costs $0.
Both have similar tax treatment. The best choice depends on your specific income level and Delaware tax situation. Use our free quiz for exact numbers.
LLC filing fee: $90, annual fee: $300/year. Sole Prop filing fee: $0, annual fee: $0/year. Delaware also charges a $300/year franchise tax.
Disclaimer
This comparison is for educational purposes only and does not constitute tax, legal, or financial advice. Filing fees, tax rates, and regulations may have changed since this data was compiled. Verify all information with the Delaware Secretary of State and consult a qualified CPA or tax attorney before making entity selection or tax election decisions.
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