Starting a business in Delaware requires fulfilling several license and tax requirements and paying state taxes. Your LLC should possess a name ending with “Limited Liability Company.”
Checking availability online with the Division of Corporations website or using Form CRA to reserve it for 120 days may be required to find your perfect business name.
Business License Requirements
Delaware LLC business license requirements depend on your company’s activities and location (zoning restrictions). In addition to meeting state-level regulations, local rules might also need to be observed; to determine this further you should reach out to local officials in your city and county to see if you need one of their municipal business licenses.
Your business must also fulfill various tax requirements, for instance Delaware does not impose sales tax but instead levies a gross receipts tax of 0.0945% to 0.7468% depending on its activity, while also filing federal taxes such as self-employment or payroll taxes if necessary.
Establish an LLC operating agreement that establishes ownership shares, responsibilities and other terms for your company. Harvard Business Services provides templates you can download or you can write your own document – both must remain internal (not filed with the state). Your operating agreement serves to maintain a “wall” between personal assets and those belonging to your business which could protect against being sued if one or both entities become subject to lawsuit.
Business License Fees
Many new and established businesses are turning to limited liability protection provided by an LLC for themselves, with getting a business license being one way.
Costs associated with applying for a Delaware business license depend on your type of business and required documents; however, in general the fees associated with forming an LLC in Delaware tend to be much lower than in other states.
Additionally, Delaware provides businesses with lower state taxes than other states and offers an easier LLC formation process – no minimum registration fee and privacy of personal data required in registering an LLC is maintained.
LLCs must obtain an Employer Identification Number (EIN), which is a nine-digit number used to identify their business when filing with the IRS. Single member LLCs without employees may use their Social Security number instead; alternatively, visit IRS website to use its free EIN search tool.
Business License Applications
The state’s One Stop Business License & Registration Service assists businesses in meeting state licensing and registration requirements for doing business in Washington State. In addition, this service assists them to register with both Divisions of Revenue as well as unemployment insurance and workers’ compensation if applicable.
Most Delaware business license applications require basic information about an LLC such as its name, EIN number and address; additional questionnaires often cover what kind of activities it conducts.
Delaware is widely acknowledged for its business-friendly laws, offering an easy LLC formation and filing process, minimal taxes on gross receipts and intangible income, as well as an exclusive court for business cases.
One of the key components of any Delaware business is its operating agreement, which details how its management will take place and provides limited liability protection to members. Although not required by law in Delaware, most LLCs would benefit from having one in place.
Business License Renewals
Delaware typically requires most business licenses to be renewed on an annual basis; however, depending on the nature of the license in question and cost considerations may require something different – please reach out to the agency that handles your license for further information about renewal requirements and costs.
Once again, check with any local government agencies that might require your business to obtain permits or licenses, such as departments of public works, economic development or health and safety in your city.
Establishing a business requires more than creativity and an idea. You will also need to meet all state naming requirements and license and registration needs, including checking URL availability and registering a fictitious name (DBA). Finally, you will require hiring a registered agent – someone or an organization who acts on your behalf when receiving legal notices on behalf of your business.
