Delaware Licenses, Permits and Registration

If you are considering starting a business in Delaware, you must register your business properly to avoid legal trouble. Following are the guidelines on how you can apply for business licenses, permits and requirements needed to conduct in Delaware:

1) Tax Registration

If you are going to operate a business in Delaware, you must apply for and obtain a state tax identification number from the Division of Revenue, as well as other income tax withholding, sales tax and use tax (sellers) permits. Business owners must also register with the Division of Revenue to pay unemployment insurance tax. You can register your business with the Division of Revenue and find more tax information by visiting the following webpage: https://onestop.delaware.gov/osbrlpublic/Home.jsp

2) Obtain a Business License

If you are a new business owner, you can apply for a new business license at the Division of Revenue. You cannot, however, apply for a business license unless you have first incorporated your business through the Division of Corporations and registered your business with the Office of Workers Compensation, along with your Workers Compensation policy information. In addition to a $15 fee, payable by credit card, you will also need to supply records about the number of employees in your company and employee salaries paid for the past five years. After you complete your application online, you will receive a temporary business license. You will receive your permanent business license after the Division of Unemployment Insurance reviews your application and mails you a letter of liability determination, and in some cases, a registration poster. Some retailers may have to pay a $15 license fee for each retail location to cover the cost of retail crime prosecution.

3) Incorporation Filing

To operate a sole proprietorship in Delaware, you do not have to register with the state. Also, you can conduct your business using your own name instead of an assumed or fictitious name, or a trade name. You must, however, formally register with the state if you use a name that is different from your own name. Furthermore, if you plan to do business in the state as a nonprofit, limited liability company, partnership, limited partnership, or corporation you must file incorporation documents with the Division of Corporations. You can get information on how to incorporate your business by visiting the following webpage: How to Form a New Business Entity in Delaware  .

4) Filing a Fictitious Name (DBA)

If you plan to use a fictitious name instead of your own name to operate your sole proprietorship or general partnership in Delaware, you must register a Fictitious Name Certificate at the Superior Court Prothontary’s office in the county where you conduct business. A fictitious name can also be used for a corporation, LLC, limited or liability partnership, or nonprofit corporation. To receive a DBA form you can call the following phone numbers: Kent County: (302) 739- 3184, and Sussex County: (302) 556-5742. To get an application for a Fictitious Name Certificate in New Castle County visit the following link: http://courts.delaware.gov/forms/download.aspx?ID=6068  .

5) Employer Regulations

If you own a business in Delaware that has employees, you must follow these general registration requirements:

• Withholding of Income Taxes: The Internal Revenue Service (IRS) mandates that you as a business owner must keep on file a record of all employment taxes for at least four years. These records can help you track your deductible expenses, prepare your tax returns, provide support for your tax returns, and prepare financial statements. All employees must complete and submit a signed withholding exemption certificate Form W-4 to their employer at the time of their hire. The employer must send the Form W-4 to the IRS to document the employee hiring and income tax withholding. Furthermore, employers are required to submit a federal wage and tax statement Form W-2 to the Social Security Administration by the end of February of the previous tax year. The Form W-2 is a report of all wages paid and taxes withheld for each employee your company paid a salary to. Employers must send a copy of the Form W-2 to each employee by January 31 of the following reporting period.
• Employee Eligibility Form: All employers who conduct business in Delaware are required by federal law to issue to each new employee, both citizen and non-citizen, an I-9 Employee Eligibility Verification Form when they are hired. The I-9 Form verifies or provides proof that the new employee is eligible to work in the U.S. A new employee must complete the form within three days after they are hired. The business owner is responsible for the completion of the I-9 form by all new employees.
• New Hire Reporting Requirements: Every business in Delaware must report all new hires and re-hires to the state Directory of New Hires within 20 days of employment. Employers must document in the report the employee’s name, address and social security number. Employers can mail or fax the new hire report to the New Hire Unit.
• Business Insurance Requirements: If you operate a business with employees in Delaware, you must pay unemployment insurance taxes. To pay unemployment taxes for your company you must register with the Division of Unemployment Insurance. Also, all companies that have employees must pay Workers’ Compensation Insurance taxes in Delaware. To get Workers’ Compensation Insurance you must register your business with the Office of Workers’ Compensation. Business owners are also required to obtain general business and liability insurance policies.