This inquiry is relevant for the business owner who plans on bringing in investors from many different states or one who plans on building a company that he/she intends on going public.  For companies with a large number of shareholders, with professional investors (such as venture capital or professional angel investors), or that intends on becoming a company worth hundreds of millions of dollars, Delaware may make sense because

 For the typical small business, it makes a lot more sense to establish an LLC Virginia- your home state.  Here is why:

First, Virginia offers the same liability protection afforded by Delaware to owners of Virginia limited liability companies. Accordingly, there is no compromise when it comes to protection.

Second, if you are going to operate your Va LLC in Virginia, you will be reqired to register it in Virginia even if it is formed in Delaware.  This registration process is similar to the process for forming one.  A filing is required containing certain legally mandated information.  Also, a filing fee is owed and the Delaware LLC needs to appoint a Virginia based registered agent.  Then each year, the business must pay the maintenance fees in both states

Business owners get stuck paying double amounts in registration and matinenance fees and for registered agent services.  For most businesse just starting out, this added and unnecessary expense just does not make sense.

Third, the main reason a business would form in Delaware is because of its business friendly and protective laws and because it has a court system that is sophisticated in corporate governance issues and at the forefront for addressing novel and difficult business disputes. 

Virginia has adopted equally protective and business friendly laws.  Forbes has rated Virginia one of the most business friendly states.  In addition, for the typical small business, any lawsuits will be over typical issues such as a contract dispute or a disagreement over services owed or payments owed.  The difficult legal entity governance issues arise in businesses with very complex governance structures. 

Plus, if you form in Delaware and end up needing to address a governance issue in court, do you want to have to travel and cover the costs for a Delaware lawyer and to address your issue in the Delaware courts?  It just is not practical for most businesses in Virginia.

The major reasons to form an LLC in another state is (i) if you have professional investors in other states who require a Delaware legal entity as a condition for their investment, (ii) you need a series LLC (which is only recognized in some states). 

An LLC is designed for the small business owner who runs his or her own business and is either a solo owner or has a handful of close partners involved.

By establishing an LLC in Virginia (where you will be operating your business), you will get all the benefits and protections and not be required to keep up with compliance in two states.