Delaware LLC Startup Guide: 12 Steps to Register Your LLC, Corporation, or DBA
Follow our step-by-step guide to register and manage your Delaware company. Find out why tens of thousands of startups trust MyCompanyWorks for fast and affordable business formations.
- Step 1: Decide on a Business Structure
- Step 2: Give Your Business a Unique Name
- Step 3: Register the Business
- Step 4: Employers Need to Apply for an Employer ID Number
- Step 5: Apply for Local or Online Bank and Credit Accounts
- Step 6: Organize Accounting and Filing Systems
- Step 7: Apply for Delaware Business Licenses and Permits
- Step 8: Hire Employees (Optional)
- Step 9: Purchase Business Insurance Policies
- Step 10: Organize and Automate
- Step 11: Form Your Business Identity and Advertise
- Step 12: Recurring Business Requirements
Delaware Business Facts and Environment
Delaware Business Facts
Delaware is the second-smallest state, with a total land area of only 1,948 square miles. It is also the least-populated state in the US and has the fewest counties.
Nicknamed “The Diamond State,” Delaware is best-known for its extremely business-friendly corporate laws.
Delaware is known by neighboring states as the “Home of tax-free shopping.”
Delaware’s economic growth is closely tied to the DuPont family, founders of one of the largest chemical companies in the world.
Tourism is one of Delaware’s chief industries, and many people travel from Washington to enjoy the shores of the Atlantic.
Delaware’s state tree is the American Holly, and its state bird is the Blue Hen.
Delaware’s capital, Dover, is only the second-largest city in the state, with a population of 38,499 as of 2020. The largest is Wilmington, with a population of 70,139.
Major Companies in Delaware
Some of Delaware’s top employers are Bank of America, Bayhealth, JPMorgan Chase, Mountaire Farms, and the University of Delaware.
Delaware Business Environment
The state of Delaware has developed its business systems to accommodate an efficient business climate. Government is both accessible and easy to work with, while favorable tax regulations attract many startups. The cost of doing business is considerably lower than in other states, so new companies will form Delaware LLCs and Corporations to benefit from the state’s friendly business environment.
Step 1: Decide on a Business Structure
The Delaware LLC is the most popular business type for startups, but you can also register a corporation or do business as an individual with a “Doing Business As” (DBA). Check out our guide on business entities.
- Delaware Limited Liability Company (LLC): A Limited Liability Company is a separate entity that provides limited liability protection to the owner(s). Taxation is recorded on individual tax returns, so there’s no need to file company tax returns. LLC owners pay less tax than traditional corporations and they’re easier to manage, making the Delaware LLC the preferred business type for new startups.
- Delaware Corporation: A separate entity is formed, which provides limited liability protection to the owner(s). A Corporation is owned and managed by shareholders, directors, and officers. Complex business models or companies with a large number of employees may need to organize as a Corporation. Some professions are required to register as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.). The corporate business structure can add unnecessary double taxation and complexity to your business, so it’s best to consult with an accountant or attorney before you make a decision.
- Delaware DBA (Doing Business As): A DBA is not a separate entity. Instead, a DBA offers a unique business name that is recognized by the state. You can use a DBA to set up bank accounts, run your business, and market your brand, but it doesn’t offer any liability protection. All the tax and legal liability are tied to you, so if your business gets sued, your personal assets are at risk. If you do decide to apply for a DBA, we recommend also applying for a federal tax ID number so you don’t have to use your social security number on business documents.
Step 2: Give Your Business a Unique Name
A name that distinguishes your business from others is more important than you might think. You’ll want to spend some time thinking of a name that represents your company well, is catchy, and is easy to remember. You’ll also want to make sure no other companies are operating under the same or a similar name. If the IRS or other government agencies mistakenly identify your company as someone else’s, you could be named in lawsuits and tax liens. Using the tips below to vet your business name will help you decide on a unique name that isn’t easily confused with other companies.
Nationwide and International businesses must be even more careful not to choose a name that is similar to other names or trademarks. More on that below.
List possible names and test on family and friends
An effective business name communicates the company’s purpose to consumers. If it is unique, easy to understand and pronounce, it’s likely to be remembered the next time someone needs your products or services. The best business names grow with the business, so broader terms like “Movie World” instead of “DVD World” are your best options. Read our guide on giving your business the best name.
Search the Delaware Secretary of State site and Google
Most states will not allow a company to register under an existing business name. The best place to do an initial name check is by running a Delaware Secretary of State business search. By running a Delaware entity search, you’ll be able to see the existing similar or same business names on their site. If another business isn’t using your name, you can run another check on Google and other major search engines to check for potential conflicts.
Search trademarked names
Check the US Patent and Trademark Office (USPTO) website for names that have a registered trademark. Trademark research can be a bit tricky and professionals can charge high fees, but we have found that searching the Internet, state sites, and the USPTO site is enough research to help you make an informed decision.
TIP: Search your business name using misspellings, plurals, and spelling variations to make sure you’re not using a name that’s already registered.
Step 3: Register the Business
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and picked your business name, here are the requirements to register your business in Delaware.
How to form an LLC in Delaware
- File the Corporate Forms And Certificates For A Limited Liability Company with the Delaware Department of State Division of Corporations
- Hire a professional Registered Agent
- Hold an Organizational Meeting
How to incorporate in Delaware
- File the Corporate Forms And Certificates For A Corporation (Articles of Incorporation) with the Delaware Department of State Division of Corporations
- Hire a professional Registered Agent
- Hold an Organizational Meeting
- Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
Notes about Incorporation and forming an LLC in Delaware
The Division of Corporations could take anywhere from 2-3 business days for e-filing to 3 to 5 days for mail filings to process the paperwork. This may increase during peak periods.
- A professional Registered Agent is a requirement for every Delaware LLC and Corporation. The registered agent must have a physical street address in Delaware. They will need to provide their address and forward state, tax, and legal documents to you. If you move your business, you’ll just need to update your address with your agent, which saves on additional filing fees and other costs.
- Hold an Organizational Meeting to collect member contributions from the members or shareholders. The meeting time should be used to issue member certificates (if applicable), adopt a company Operating Agreement and determine each owner’s responsibilities. Without the Organizational Meeting, your company can possibly be exposed to legal, tax, and compliance issues. Save time and money now by properly organizing the company.
How to File a DBA in Delaware
DBAs are filed with the county where your business operates. Contact your local County Recorder to find out which forms are required to complete the process. You can find the local county recorder’s office by searching “YOURCOUNTY county recorder” on the Internet.
- Search your business name as listed in step 2.
- Complete and file the correct forms with the county to register your DBA.
Let MyCompanyWorks Form Your LLC or Corporation
Just 5-10 minutes is all it takes to complete an LLC or Corporation order. We’ll do all the legwork while you work on other important business.
- Fast, easy, and affordable LLC and Incorporation filings online
- Thousands of verified 5-star reviews and our 100% Satisfaction Guarantee
- Check our Startup FAQs, and blog, and reach out to our support team to get started today
Step 4: Employers Need to Apply for an Employer ID Number
(Optional for DBAs, unless they have employees)
All Delaware Corporations and LLCs are required to have an Employers Identification Number – also known as an EIN or federal tax ID number. If you run your business as a DBA, without an EIN you’ll have to use your personal social security number on business, tax, and legal documents. Using an EIN can help prevent personal identity theft, so we recommend that all DBAs apply for a free EIN. You can apply online through the IRS website or by submitting IRS Form SS-4.
NOTE: International clients must apply for an EIN by phone.
Step 5: Apply for Local or Online Bank and Credit Accounts
Businesses should have bank and credit accounts that are separate from the owners’ personal finances. You can check with local banks and credit unions to find out what kind of business solutions they offer. You can also search the Internet for online banking and credit options. If you’re not dealing with cash, an online bank may charge lower fees.
Each financial institution has different requirements, but you can expect to provide the following documents to open accounts:
- Personal Identification
- Completed LLC or Corporation organization documents
- Employer Identification Number (also called tax ID)
- Official business resolution signed by owners or members to open accounts
Top Delaware Business Banks:
- Taylor Bank
- Provident State Bank
- Artisans’ Bank
- Wilmington Trust
- Shore United Bank
Our business banking partners can help you find the best business bank and credit solutions.
Step 6: Organize Accounting and Filing Systems
Delaware businesses are required to keep official accounting records. The best way to keep records is to organize your accounting system. You can use pen and paper, a spreadsheet, or software, but it’s easiest to start your accounting at the start of business. You can find simple and affordable accounting software in our network of recommended vendors.
Your company is also responsible for paying taxes, so scheduling those returns on your calendar will prevent late filings, added fees, and being shut down by the state. Check out our guide to business taxes for more information and tax help.
Records must be kept for at least three years, and tax records should be kept for at least seven years. You’ll want to keep an updated list of owner contact information handy, as well as company organization documents, financial records, annual filings, and any documents that denote changes to the company’s name, business structure, etc.
Read our Accounting and Financial Management guide for help setting up an accounting system and purchasing accounting software.
Hire professionals to manage your books and business records. Accountants, Accounting Software, and Bookkeepers in our Vendor Network offer exclusive pricing for MyCompanyWorks clients.
Step 7: Apply for Delaware Business Licenses and Permits
Most companies don’t have to register with the federal government, but Delaware requires all businesses to register with the state and carry certain licenses and permits, depending on your type of business. Business licenses and permits are required before you start doing business. You can save time and money by ordering a Business License Compliance Package from our partners.
The State of Delaware has a One-Stop Business Registration and Licensing System where you can register your business with the Division of Revenue, the Division of Unemployment Insurance, and the Office of Workers Compensation.
Step 8: Hire Employees (Optional)
If your business employs workers (even if it’s just you), you’ll need to register with Delaware’s employment authority and may need to apply for Workers Compensation and Unemployment Insurance. Read about employees and payroll in our helpful guide.
Find recommended payroll providers to handle payroll and taxes for you.
Step 9: Purchase Business Insurance Policies
Your business will have different insurance needs based on your industry. May companies carry general business (or general liability) insurance, owner’s insurance, and workers’ compensation coverage. You’ll also need to shop for options if you plan to offer health insurance. Even if it’s not required, you can at least protect your business assets with an affordable general liability or business owner’s policy. These types of policies cost just a few hundred dollars each year and are well worth the coverage they offer.
Get free quotes and affordable pricing from one of our recommended insurance providers.
Step 10: Organize and Automate
In the beginning, you may be your only worker, but it’s important to set up your business so anyone could run it for you. If you have a system for things like processing orders, paying bills, employees, taxes, and maintaining permits, it will be easy for someone to take over if you’re not able to run the business. It also makes selling your business easier, because you’re showing potential buyers how to run the business.
If you can automate recurring tasks, you’ll have more time to work on growing your business. There are loads of software to automate everything from paying bills to managing taxes. MyCompanyworks Premium™ helps you manage ongoing tasks in one place. Learn how to manage your company with a system.
Step 11: Form Your Business Identity and Advertise
Now that your business is registered, it’s time to develop a creative logo and website that represents your business. Set up social media accounts and advertise on sites like Yelp and yp.com for free. Brand awareness and consistent marketing are critical to every business, so it’s worth spending the time to plan your logo, colors, theme, etc. Read our guide to start a fast and simple marketing plan and check out our Marketing and Sales resources for more information.
Step 12: Recurring Business Requirements
DBA (Doing Business As): Delaware DBAs should be valid for 5 years unless you make changes to the business name or other details on the DBA. Renewals are filed with your county and should be filed before the expiration date to prevent the loss of using the name.
LLC: Delaware LLCs are required to pay an annual tax of $300 on, or before June 1 each year. There is no requirement to file an annual report.
Corporation: All businesses incorporated in Delaware must file an annual report and a franchise tax. Even if your corporation is tax-exempt, you must still file an annual report before March 1 each year. The annual filing fee is $49, and the minimum tax is $225. Annual reports can be filed online through the Delaware Corporations Information System.
Delaware Franchise Tax: All DE corporations and LLCs are required to file a Franchise Tax return and pay $300 each year. Returns and payments are due on or before June 1st. This is standard protocol for an LLC, regardless of age, sales, activity, or inactivity. A late penalty of $200 is levied against businesses that fail to pay on time.
Automate recurring tasks with MyCompanyWorks Premium™. Set most compliance tasks to auto-pilot so you can work on your business.
Important Delaware Contacts
Delaware Divisions of Corporations
Delaware State Taxation Departments
Delaware Department of Professional Regulation
Delaware State Labor and Employment Departments
Delaware Startup Resources
1. Delaware Small Business Administration
Small Business Administration (SBA) Delaware State District Office
2. SCORE Mentors
SCORE is made up of active and retired business people who volunteer their time to support startup businesses. From coaching to funding resources, finding a local SCORE mentor can save precious time and money.
- Delaware Business Portal
- Delaware Small Business Development Center
- Delaware Job Link Employer Portal
- Tax Information For Delaware Businesses
3. Delaware State Legal Statutes:
- Delaware Business Corporation Act
- Delaware State Limited Liability Companies – the specific act that applies to Delaware State LLCs.
- Delaware State Businesses and Professions – includes regulations on topics such as business and professions codes.
4. Delaware State Chambers of Commerce
5. Delaware Angel Investors
6. Delaware Business News
7. Delaware State Small Business Development Center
