Ohio vs. Delaware LLC Formation — 2026 Cost, Annual Fees & Requirements Comparison

1. Compare formation fees: OH $99 vs. DE $90 Ohio's $99 formation fee is marginally higher than Delaware's $90 — a $9 difference that is entirely irrelevant over any meaningful time horizon. Both states allow online filing, and Delaware offers more granular expedited processing options. For most formations with no hard deadline, the formation-fee difference is not a deciding factor.
2. Compare annual obligations: OH $0/yr vs. DE $300/yr Ohio LLCs have NO annual report and NO annual fee at the state level. Once you pay the $99 formation fee, your Ohio LLC has zero state-mandated annual cost (excluding registered agent). Delaware charges $300/yr regardless of revenue. Over 3 years: Ohio ~$99 ($99 + 3×$0) vs. Delaware ~$990 ($90 + 3×$300). Ohio saves $891 over 3 years and ~$297/yr ongoing — nearly $1,500 over 5 years. This is the decisive cost advantage for the 95% of businesses that don't need Delaware's Court of Chancery.
3. Understand who Delaware is actually for Delaware's $300/yr cost is justified in specific circumstances: (1) VC-backed startups where institutional investors require or prefer a Delaware entity. (2) Companies planning an IPO or acquisition where Delaware Court of Chancery certainty is expected for governance disputes and M&A documentation. (3) Complex multi-member structures where investors want Delaware's flexible, contractually-driven LLC Act. For small and mid-sized businesses with no institutional investor expectations, Delaware's ongoing cost premium delivers no tangible benefit.
4. Compare charging-order protection Ohio's LLC Act (Ohio Revised Code § 1705.19) provides charging-order protection for creditors of LLC members — a creditor can obtain a charging order against a membership interest but generally cannot foreclose or force a liquidation. Delaware's LLC Act (6 Del. C. § 18-703) similarly provides charging-order protection. Neither Ohio nor Delaware provides the same level of explicitly-exclusive-remedy protection as Wyoming's statute (Wyo. Stat. § 17-29-503). For maximum asset-protection, Wyoming remains the preferred jurisdiction; Ohio and Delaware are comparable for standard liability protection.
5. Compare Delaware's Court of Chancery advantage Delaware's Court of Chancery is a dedicated business court with specialist judges (chancellors), no juries, and over a century of LLC and corporate case law. It provides highly predictable outcomes for complex governance disputes, fiduciary-duty claims, and M&A transactions. Ohio courts handle business disputes competently but lack the institutional depth and investor familiarity of Delaware's Court of Chancery. For Ohio-operating businesses with no institutional investors, this advantage never materializes in practice.
6. Factor in Ohio's Commercial Activity Tax (CAT) Ohio's Commercial Activity Tax applies to businesses with Ohio gross receipts over $150,000 (at approximately 0.26% on receipts above that threshold). This is an Ohio-side tax that applies regardless of formation state. It is not a franchise tax equivalent — it's a gross-receipts tax on Ohio-sourced revenue. A Delaware-formed LLC doing business in Ohio must register as a foreign LLC in Ohio and is subject to the CAT on Ohio receipts. The CAT is in addition to whatever the LLC's formation state charges annually.
7. Choose your state and file For Ohio-operating businesses: form in Ohio (businessfilings.ohiosos.gov, $99). Ohio's $0/yr ongoing cost vs. Delaware's $300/yr is the largest single factor — and for the 95% of businesses without institutional investors, Delaware's Court of Chancery never delivers value. For VC-backed startups or acquisition-track entities: form in Delaware, accept the $300/yr cost, and register as a foreign LLC in Ohio if operating there. After formation in either state, obtain an EIN at irs.gov/ein, draft an Operating Agreement, and open a business bank account.

Ohio Limited Liability Company Act, Ohio Revised Code § 1705.01 et seq. (pre-2022) and § 1706.01 et seq. (Ohio Revised Limited Liability Company Act, effective 2022); Ohio CAT: Ohio Revised Code § 5751; Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq.; Delaware Annual LLC Tax: 30 Del. C. § 502(b).

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Ohio vs. Delaware LLC — common questions