The state of Delaware is one of the most "business friendly states" in the Nation. According to the Delaware government published statistics (2011) close to one million business entities have their legal home in Delaware including more than 50% of all U.S. publicly-traded companies and 60% of the Fortune 500.
Like most states, Delaware offers assistance to existing business owners to help them relocate their business to the state.
- Delaware Business Financing Programs
- Relocation Assistance, Finding Commercial Properties in Delaware
- Local and Small Business Partners
- Statewide and National Business Resources
Choosing The Right Business Structure
If you are considering starting your own business in Delaware the first step is to decide what type of business structure will be the most beneficial. Different business structures expose owners to different types of financial liability if sued, as well as different tax liabilities.
For example, in Delaware, sole proprietorships do not have to pay a franchise tax, while partnerships, corporations, and limited liability companies do. But sole proprietorships also expose the sole proprietor to liability for the debts of the business.
To help you understand business structures:
- Chart Showing Franchise Tax Fees for Different Business Structures in DE (pdf)
- Types of Small Business Structures
Filing a Fictitious Name Statement Certificate
In Delaware, the terms "doing business as" (DBA) and Trade Name are synonymous with a fictitious name certificate / statement.
Delaware law states, that, "In Delaware, no person, firm, association, or company can transact business without using their actual legal name within the State unless you file a Fictitious Name Certificate."
This means every business entity including sole proprietorships. Even if you only run a dog walking service, you may need to file a fictitious name statement.
One of the things that makes Delaware laws a little confusing for new business owners is that you file a for the county in which you are doing business; a single fictitious name statement does not allow you to conduct business throughout the entire state. You must file a separate request in each county you plan to do business in.
To register your business, start by filing a fictitious name certificate with the Prothonotary's office in the Superior Court for the particular county you are going to be doing business in. The fictitious name registration does not cover you statewide.
Having trouble deciding on a name for your business? Try 8 Tips for Naming Your Business.
Getting A Business License
A fictitious name certificate is not the same thing as a license to do business in Delaware and you will also need to obtain a business license. Applications for business licenses can be obtained through the The Delaware Department of Revenue website.
About Delaware Corporations
Delaware has long been known as the "quick and easy" solution to forming an out-of-state corporation. This is not entirely true. Although Delaware does incorporate non-resident corporations, you will be required to pay an annual Franchise Tax for the privilege of incorporating in Delaware. The fee is based on the number of authorized shares within the corporation and is payable to the Delaware Division of Corporations.
If your business is incorporated in another state but doing business in Delaware, you must still register with the Delaware Division of Corporations.
Tax exempt corporations are not required to pay corporate taxes in Delaware, however, even nonprofit corporations are still required to file an annual report.
Delaware Business Resources
The Delaware Business Blog offers tips, resources, legal updates of interest to small business owners in Delaware. The blog also features "how-to" tips for getting starting, marketing, and even social networking.
The Department of Revenue contains a wealth of information for potential and existing business owners, including information about paying taxes, establishing a business in Delaware, registering a corporation in Delaware (whether your business is physically located outside or inside the state.)
How To Form a New Business Entity provides more detailed information about forming all types of business structures in Delaware. For more information call the Delaware Division of Corporations at Phone: (302) 739-3073, or visit www.corp.delaware.gov.
The Delaware Workforce Development Program help employers maximize work productivity and employee potential. Delaware's Workforce Team coordinates and funds employment and customized training activities that help new and existing employers achieve their company goals.
The U.S. Census Bureau Delaware Quick Facts offers a wealth of information about the demographics of residents in Delaware. View statewide data, or select a particular county or city to learn more about the location your business serves.