How to Start a Business in Delaware

Introduction

Delaware is a popular choice for businesses in part because of the state’s business-friendly environment. Starting a business in Delaware can be relatively simple, but it’s important to make sure you have all of your ducks in a row before opening your doors. If you’re considering starting a business here, here are some things you’ll need to do:

Decide your Business Structure

Once you’ve decided on the type of business, it’s time to decide how that business will be structured. There are many options for doing so, but it’s important to choose the one that best fits your needs as well as your comfort level.

There are four main types of business structures available: Sole Proprietorship, Partnership or Joint Venture, Limited Liability Company (LLC), and Corporation. Each has its own advantages and disadvantages; some are better suited for certain industries than others. For example, if you want to start an online retail store selling products like t-shirts or mugs with funny sayings on them then an LLC would be a good option since LLCs protect owners from liability when they sell their goods off-site by not requiring any formal procedures on behalf of the owner.

Choose a Business Name

Choosing a business name is important to your success. A business name that is easy to pronounce, spell and remember will help customers find you. Make sure the name isn’t already in use by checking with the Delaware Division of Corporations or by doing a search on Google or another search engine. If you plan on selling products online, make sure your domain name is available so people can easily find it when searching for similar items on websites like Amazon or Etsy.

Register your Business Name with Delaware DOC

Registering your business name in Delaware is one of the first things you’ll want to do. The process is free, easy and can be done online.

Before doing so, make sure that no other businesses have already registered the same or similar name with the Delaware Division of Corporations (DCO). If they have, you will not be able to use it for yourself or your new business!

The DCO allows you to register a trade name or any fictitious business name for $25 per entity. Once this step has been completed, your new company should legally own its corporate identity in Delaware regardless of whether it’s physically located there yet.

Get an Employer Identification Number (EIN)

You will need an EIN (Employer Identification Number) to pay employees, file taxes, and open a business bank account. To obtain an EIN you can:

• Go online using the IRS’s website
• Mail your application to the IRS address listed on form SS-4
• Visit any Taxpayer Assistance Center and fill out Form SS-4 in person

Get a License or Permit for your Business

If you need a license or permit for your business, the Delaware Division of Revenue will help you obtain and maintain it.

The following are examples of licenses or permits that may be needed:

• Business License, which is required of all businesses operating in Delaware. The business license fee is calculated using the number of employees and total gross receipts.
• Certificate of Authority (COA), which must be obtained before taking any action on behalf of a foreign corporation doing business in Delaware.
• Certificate of Good Standing (CGST), which must be obtained from the Secretary of State prior to taking any action on behalf of a foreign limited liability company doing business in Delaware. The COA and CGST can be obtained online.

Open a Business Bank Account

Once you’ve decided on a business structure and location, it’s time to open a business bank account. The services offered by banks vary widely, so choose one that offers the services you need. For example, some offer online banking and others don’t; some are good at handling payroll and others aren’t; some have low fees while others charge high fees for everything under the sun.

Once you’ve chosen a bank (or two or three), open an account with both a business checking account and a money market savings account to keep your funds separate from personal expenses. And if possible, try out their online banking service—it can be convenient if you’ll be doing most of your work from home.

Takeaway

Starting a business in Delaware is easier than you think. A small state with a small government, Delaware has one of the lowest tax rates in the country and a thriving business community. It’s also known for being very business-friendly, so if you’re starting your own company or expanding an existing one, it’s worth considering this beautiful state as the location for your new headquarters.

Conclusion

We hope that this guide has helped you learn more about the different ways to start a business in Delaware. While it may seem like there are a lot of steps, don’t stress! The easiest way is to just follow our tips on how to register your name and get an EIN. Then, you can get everything else done in one trip when it comes time for you to open an office or hire employees.