How to Start a Business in Delaware

Step 1: Choose Your Business Structure

How you start depends on the structure you pick. A sole proprietorship operating under the owner's own legal name requires no state formation filing at all; you can generally start simply by meeting the licensing and tax steps below. An LLC files a Certificate of Formation with the Delaware Division of Corporations for $110, stating only the LLC's name and its registered agent, since Delaware law doesn't require listing members or managers on this public document. A corporation files a separate Certificate of Incorporation with its own fee schedule. Weigh the liability protection an LLC or corporation provides against the added paperwork compared to a sole proprietorship.

Step 2: Name Your Business and Check Availability

If forming an LLC, your name must contain "Limited Liability Company," "L.L.C.," or "LLC," and must be distinguishable from every other entity name on file with the Division of Corporations; search the Division's entity search tool before filing. If you'll operate under a name different from your own legal name (sole proprietor) or your entity's legal name, Delaware requires a trade name (DBA) registration, filed through Delaware One Stop with the Division of Revenue for $25. Since February 2, 2026, this is a single statewide filing that doesn't expire, replacing the county-level filing Delaware used before.

Step 3: Appoint a Registered Agent, If You Form an LLC or Corporation

An LLC or corporation must maintain a registered agent with a physical street address in Delaware. Delaware is more flexible than many states here: the agent can be the LLC itself, a Delaware resident, or a domestic or foreign entity, as long as whoever serves keeps a business office at the registered address. A sole proprietorship has no registered agent requirement, since it isn't a separate legal entity.

Step 4: Get an EIN From the IRS

Once any required state filing is approved, or immediately if you're a sole proprietor, apply for a free Employer Identification Number from the IRS. Most banks require one to open a business account, and you'll need it for many state tax registrations as well.

Step 5: Get Your Delaware Business License

Anyone doing business in Delaware, across every entity type, generally needs a State of Delaware Business License from the Division of Revenue, generally about $75 a year for a first location (a three-year license costs three times the annual fee). This is separate from, and in addition to, any entity formation filing.

Step 6: Understand Delaware's Gross Receipts Tax

Delaware has no state or local sales tax. Instead, a business operating in Delaware pays gross receipts tax on what it sells or bills, at a rate from 0.0945% to 1.9914% depending on the specific business activity, filed monthly or quarterly with the Division of Revenue. Confirm your specific activity's rate before setting prices, since it applies regardless of the entity structure you choose.

Step 7: Register as an Employer, If You'll Hire

Before your first hire, register for unemployment insurance with the Delaware Department of Labor on Form UC-1, within 20 days of your first day of business. This applies whether you operate as a sole proprietor, LLC, or corporation.

Step 8: Know Your Ongoing Obligations

An LLC pays a flat $400 annual LLC tax by June 1 each year, with no separate annual report, while a corporation follows its own franchise tax rules. A sole proprietorship has no equivalent state filing, though its Delaware Business License and any trade name registration still need to be maintained. See our Delaware LLC guide for the complete LLC-specific requirements in one place, including the full registered agent and annual tax rules, and our guide to forming an LLC in Delaware for the step-by-step filing process if you choose that structure.

Choosing Not to Form an Entity Has Real Tradeoffs

A sole proprietorship is simpler to start, but it gives the owner no separation from the business's debts or liabilities. Weigh the $110 LLC filing fee and ongoing $400 annual tax against the personal liability protection an LLC provides before deciding a sole proprietorship is the simpler path overall.

Operating Outside Delaware Adds a Second State's Requirements

If your business actually operates in a state other than Delaware, that state generally requires its own registration, licensing, and tax compliance in addition to anything done in Delaware. Delaware's well-known entity law doesn't exempt a business from its home state's rules if it operates elsewhere.

The Business License and the Entity Filing Are Separate Deadlines

It's easy to track your LLC's annual tax deadline and forget that the Delaware Business License also needs renewal on its own schedule. Keep both on your compliance calendar rather than assuming one filing covers the other.

This Isn't Tax or Legal Advice

Which structure fits best, and how the gross receipts tax applies to your specific business activity, depends on your situation. Talk to a tax professional, particularly if you're unsure whether your activity falls into a specific gross receipts tax rate category.

Keep Your Registered Agent Information Current

If you form an LLC or corporation, Delaware requires maintaining a registered agent continuously, not just at formation. Update your agent information with the Division of Corporations promptly if it changes, since a lapsed registered agent can affect your entity's good standing.