Launching a Software-as-a-Service (SaaS) venture from day one on a solid legal footing is critical for funding, tax efficiency, and credibility. Delaware remains the preferred jurisdiction for U.S. and international founders because it combines strong case law with flexible statutes. Below is a step-by-step formation checklist—tailored to SaaS founders incorporating in 2025—to help you avoid surprises and keep investors confident.
Relevant IRC Codes & Definitions
| Code | Why It Matters to a Delaware LLC |
|---|---|
| IRC §7701 | Defines default federal tax status—single-member LLCs are disregarded; multi-member LLCs default to partnerships. |
| IRC §301.7701-3 (Check-the-Box Regs) | Allows an LLC to elect C-Corp or S-Corp taxation (Form 8832 or 2553). |
| IRC §162 | Permits deduction of ordinary and necessary startup costs, including formation fees and registered-agent charges. |
| Corporate Transparency Act (FinCEN BOI Rule) | Effective 2024—requires nearly all LLCs to report their beneficial owners within 30 days of formation. |
IRS & State Form References
- SS-4 – Apply for your EIN (no SSN needed; use third-party designee if outside U.S.).
- Form 2553 (optional) – Elect S-Corp taxation within 75 days of formation.
- Delaware Certificate of Formation – One-page filing that creates the LLC.
- BOI Initial Report – Submit to FinCEN within 30 days of receiving your Delaware file-stamped document (required for 2025 formations).
- Delaware Franchise Tax / Annual Report – Flat $300 for LLCs; due 1 June 2026 (first return).
Real-World Example
Case-Study: CloudPulse LLC
- Two founders, $1,000 capital, intending to raise a seed round.
- Elected pass-through (partnership) taxation for Year 1.
- Completed BOI filing within 10 days.
- Filed 2553 in Year 2 to convert to S-Corp once salary levels justified payroll-tax savings.
Outcome: Stayed compliant, minimized taxes in Year 1, and streamlined the cap-table transition for future investors.
Step-by-Step Formation Checklist
- Choose a Unique Name – Must contain “LLC” and avoid restricted words.
- Appoint a Delaware Registered Agent – Required physical address in Delaware.
- File the Certificate of Formation – Online or via a formation service; pay $90 filing fee.
- Draft an Operating Agreement – Not filed with the state but essential for ownership, IP, and decision-making clarity.
- Obtain an EIN – File Form SS-4; use LLC’s U.S. address or registered-agent address as “care of.”
- Open a Business Bank Account – U.S. fintech banks accept remote onboarding for foreign founders with EIN + passport.
- File FinCEN BOI Report – Submit beneficial-ownership information within 30 days.
- Register for State & Local Taxes (if applicable) – Only if you have Delaware employees or sales within Delaware.
- Calendar the $300 Franchise Tax – Due every 1 June, beginning the calendar year after formation.
- Track Deductible Startup Costs – Legal, software subscriptions, and hardware expenses under IRC §162.
Conclusion
A Delaware LLC offers SaaS founders flexibility, investor appeal, and straightforward compliance—but only when every step is completed on time. Skipping the BOI filing, delaying the EIN, or forgetting the $300 tax can derail fundraising or trigger penalties. Follow this 10-step checklist and you’ll launch on the right side of Delaware law and the IRS.
Call to Action
Need help executing this checklist or deciding whether to elect S-Corp status?
👉 Book a formation strategy session with Anshul Goyal, CPA, and set up your Delaware LLC the investor-ready way—taxes, BOI, and bank account included.
Disclaimer
This guide is for educational purposes only and does not constitute legal or tax advice. Formation requirements can change, and individual facts matter—especially for non-U.S. founders, multi-member structures, or entities planning equity incentives. Consult a qualified professional before acting.
Anshul Goyal, CPA EA FCA is licensed in the United States as a Certified Public Accountant, admitted to practice before the IRS as an Enrolled Agent, and a Chartered Accountant in India. He assists SaaS founders worldwide with Delaware formations, cross-border tax strategy, and IRS compliance.
FAQs (Top 5 High-Searched Questions)
1. Do I need to live in the U.S. to form a Delaware LLC?
No. Any foreign individual can form and own 100 %.
2. Is the Operating Agreement mandatory?
Not required by Delaware, but vital for investor diligence and dispute prevention.
3. When is my first tax filing due?
Delaware LLC tax is a flat $300, due 1 June the following year.
4. Can I convert my LLC to a C-Corp later?
Yes—Delaware allows statutory conversion without dissolving the LLC.
5. What triggers BOI penalties?
Failure to file within 30 days can incur $500 per day in FinCEN penalties.
About Our CPA
Anshul Goyal, CPA EA FCA has guided 2,000+ tech founders through U.S. entity formation and saved clients over $200 million in taxes. His practice focuses on SaaS, AI, and cross-border startups seeking venture capital and IRS peace of mind.