Our work is reader-supported, meaning that we may earn a commission from the products and services mentioned.

Delaware Business License Basics

Delaware Business License Basics

Advertising Disclosure

Advertising
Disclosure

Delaware Business License Basics

Starting a small business in Delaware often means registering with several federal, state, and local agencies. Let’s review common Delaware business license registrations so your business starts off right.

Related: Guide to starting a business in Delaware 

First Step – Set Up the Business

Sole proprietorship: In Delaware, a sole proprietorship is a business owned by one person. It is the simplest form of business structure, with no legal distinction between the owner and the business. The owner has complete control over the business but is also personally liable for all debts and obligations.

General partnership: A general partnership in Delaware is an agreement between two or more individuals to operate a business together. No formal setup is needed, but a partnership agreement, but it’s a great idea to draw up a partnership agreement to outline operations and responsibilities.

Corporation: A Delaware corporation is a legal entity separate from its owners, known as shareholders. It offers limited liability protection, meaning shareholders are not generally personally responsible for the corporation’s debts and liabilities. The downside is that corporations are the most complex structure to start and operate. 

Limited Liability Company (LLC): A Delaware LLC combines aspects of a sole proprietorship or partnership and a corporation. It provides limited liability protection to its owners, called members, shielding their personal assets from the company’s debts and liabilities, in addition to a flexible management and tax structure.

Related: Comparison of Business Structures

What Licenses Do Delaware Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Delaware may need. There isn’t a standard business license, as requirements vary depending on where the business is located and its activities. Here is a general overview of the different registrations your business may need.

Delaware State Business License

Every person or entity conducting a trade or business in Delaware is required to obtain a business license from the Delaware Division of Revenue.   The Delaware Business License can be applied online through the Delaware One Stop Business Licensing and Registration Service or on paper form CRA (Combined Registration Application).

Even though Delaware does not impose a state sales tax, there is a gross receipts tax for most businesses. The CRA form outlines the rate and allowable exclusion in more detail.

City Business Licenses

In addition to the State Business License, many Cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and the business’s activities. Below are a few cities that have licensing requirements.

  • Wilmington:  Businesses operating within City limits need to obtain a Wilmington Business License from the Business License Division.
  • Dover: The City of Dover requires a business license for several types of businesses, including; barbers, contractors, daycare, shoe repairmen, and many others
  • Newark – Businesses operating in the City of Newark are required to get a business license.
  • Middletown: The Town of Middletown requires all businesses and contractors to get a business license.
Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Assumed Name Registration

Sole proprietorships and partnerships in Delaware that want to operate under a business name other than the full name of the owner(s) will register for a Delaware Assumed Name (also known as a Doing Business As, DBA, Fictitious Name, or Trade Name) with the Prothonotary’s Office in the counties where you plan to transact business.

Building & Zoning Permits

Zoning: Before starting a business, check with your local planning and zoning department to ensure compliance with zoning laws. For home-based businesses, you may need a home occupation permit, which is issued by the local zoning department. In New Castle County, home-based businesses are allowed in residential zones, subject to specific requirements and restrictions.

Building Permit: If you plan to construct, alter, or repair a building for your business in Delaware, you’ll need a building permit from your local building department. Building permits ensure compliance with the Delaware State Building Code. In most cities and counties, the local building department is responsible for issuing building permits. For example, in Wilmington, building permits are issued by the Department of Licenses and Inspections.

Signage Permit: Before installing any business signage in Delaware, you may need to obtain a sign permit from your local government, as each city and county has its own signage regulations and permit requirements. In Dover, sign permits are issued by the Department of Planning and Inspections, while in Newark, the Building Department handles sign permits. Check with your local government for specific signage requirements and permit application processes in your area.

Occupational License

A variety of occupations and professions in the state are regulated and need to be registered before offering certain services.  A few common professions that require licensing in Delaware include; accountants, cosmetologists, gun dealers, appraisers, and many more.   Additional information, fees, and licensing requirements for professions are available from the Delaware Division of Professional Regulation.

Contractor’s License

To become a state licensed general contractor in Delaware, the process will be run through the Delaware Department of Revenue. Contractors are defined as individuals engaged in the business of furnishing labor or both labor and materials in connection with all or any part of construction, alteration, repairing, dismantling, or demolition of buildings, roads, bridges, viaducts, sewers, water, and gas mains and every other type of structure as an improvement, alteration or development of real property.

The state of Delaware has two different licenses for contractors – the Resident Contractors License or Non-Resident Contractor License. Registration is through the Delaware Division of Revenue

Employer Identification Number (EIN)

The Delaware Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Delaware. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.

Next Steps

While it’s a good start, there are so many different licenses that may be needed. Double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

 

Delaware Business License Basics

Delaware Business License Basics

Leave a Reply

Your email address will not be published. Required fields are marked *

Some (but not all) of the links on StartUp101.com are affiliate links. This means that a special tracking code is used and that we may make a small commission on the sale of an item if you purchase through one of these links. The price of the item is the same for you whether it is an affiliate link or not, and using affiliate links helps us to maintain this website.

StartUp101.com is also a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Our mission is to help businesses start and promoting inferior products and services doesn’t serve that mission. We keep the opinions fair and balanced and not let the commissions influence our opinions.