How to Get a Small Business License in Delaware

If you're looking to open a business in Delaware, you'll need to make sure you're following all the laws and rules that apply to your type of business. Specifically, you must obtain the required licenses and permits from your state and local governments.

Let's look at the most common licenses, permits, and registrations you need to start your business in Delaware.

Which Business Licenses Do You Need for Your Small Business?

When starting a business in Delaware, you must:

• register your business entity with the Delaware Division of Corporations (DOC)
• file taxes with the Delaware Division of Revenue (DOR), and
• apply for business licenses and permits with your state, county, and town.

Your business structure, industry, and location will determine the types of licenses and permits your business must apply for. The main types of business licenses, permits, and registrations are:

• general business licenses
• professional licenses
• seller's permits (sometimes called "sales tax certificate" or a similar name)
• zoning and building permits, and
• doing business as (DBA) registrations.

(For more general guidance, see our article on the legal requirements for starting a small business.)

General Business License in Delaware

Every Delaware business (and every non-Delaware business operating in the state) is required to get an annual state business license. You must obtain your general business license from the DOR, a division of the Department of Finance. (Del. Code tit. 30, § 2101 (2024).)

You can register for the license online through Delaware One Stop. You'll need to first create an account.

License fee. Your license fee will depend on your type and category of business. The license fee varies, but most often is $75. You'll also need to pay a small fee for each additional business branch or location. In addition to the set annual license fee assigned to your business category, your business must also pay a license fee every month or quarter that's equal to a percentage of your gross receipts. As of 2024, the rate is 0.3983% of the aggregate gross receipts. (Del. Code tit. 30, § 2301 (2024).)

Term of license. Most general business licenses are good for one year. Your license will expire on December 31. Following your first year of licensing, you can (but don't have to) renew your license for three years instead of for one year. You'll need to pay a fee equal to the number of years that your license is good for. Three-year licenses aren't discounted.

Renewal of license. You'll need to renew your license by December 31 each year or before its expiration. The DOR will send out a reminder about your upcoming renewal obligations. You can renew your license online through the DOR's Taxpayer Portal.

Once you register your business, you'll receive your general business license. You'll need to display your license in either your place of business or your main office. (Del. Code tit. 30, § 2109 (2024).)

To find out more, check out the DOR's business license FAQ webpage.

You might also need additional state licenses or permits depending on your specific type of business. These licenses and permits can be issued by various state agencies. For example, a restaurant will likely need to apply for a food establishment permit from the Division of Public Health within the Delaware Department of Health and Social Services.

In addition to state licenses and permits, you might need to obtain licenses from your local government. The requirements vary depending on the city or county involved. Some cities and counties require every business to have a license while others require only businesses in particular industries to get a license. For example, the City of Wilmington requires any business that wants to operate within city limits to have a city business license.

You can find more details by checking the website for the city and county where you'll operate your business. (Some businesses might be exempt from local licensing requirements under state or federal law.)

Professional and Occupational Licenses for Businesses and Individuals in Delaware

Before you start practicing, you need to make sure you have the licenses and certifications required for your industry. You could need a license for you, as an individual, and for your business.

The Division of Professional Regulation (DPR), a division of the Department of State, oversees the state's many professional regulatory boards. The homepage of the DPR website lists virtually all of the regulated professions. The list runs from Accountancy to Veterinary Medicine. By clicking an item on the list, you'll be taken to a webpage with detailed information about a profession or occupation's regulatory board, licensing requirements, and related forms.

For example, "accountancy" links to a webpage where you can find information related to:

• the Board of Accountancy, including members, meetings, and contact information
• license applications and renewals
• exams and courses
• continuing education and audit requirements
• laws, rules, and regulations, and
• frequently asked questions.

You'll need to follow rules and requirements specific to your profession or occupation. These rules and requirements vary. For instance, your profession might require you to pass an initial licensing exam or complete continuing education courses.

You should contact your regulatory authority directly if you're unsure about how to apply for or maintain your license or certification.

No Sales Tax in Delaware

Delaware is one of five states without a state sales tax. In addition, there is no local sales tax in Delaware. While your business doesn't need to worry about sales tax, you're not necessarily off the hook. Your business will still need to pay the annual license fee and gross receipts tax (as discussed earlier).

If your business sells tangible personal property (goods), you'll probably need to pay an additional retail or wholesaler license fee and gross receipts tax. (Del. Code tit. 30, § 2301(c) (2024).)

Retailers: In general, a "retailer" is anyone who sells goods to a final consumer. In other words, the final consumer will consume or use those goods, not resell them. A retailer must pay a $75 annual license fee and a tax on annual gross receipts to the DOR. As of 2024, the rate is 0.7468% of the aggregate gross receipts. The tax on gross receipts is due every month or quarter depending on the amount of taxable gross receipts. (Del. Code tit. 30, §§ 2901 and following (2024).)

Wholesalers: In general, a "wholesaler" is anyone who sells goods for the purpose of resale. Typically, these types of sales are made to stores, outlets, warehouses, and distribution centers. A wholesaler must pay the DOR a $75 annual license fee for each place of business along with a tax on annual gross receipts. As of 2024, the rate is 0.3983% of the aggregate gross receipts. The tax on gross receipts is due every month or quarter depending on the amount of taxable gross receipts. (Del. Code tit. 30, §§ 2901 and following (2024).)

Depending on your type of business and its activities, you might need to pay other taxes and fees. You can pay your gross receipts tax along with other taxes and fees through the DOR's Taxpayer Portal. You should also check with your city or county to learn about their tax reporting requirements.

If you need help determining what taxes your business is responsible for, talk to a business attorney or a tax professional. While Delaware offers many tax advantages, it's best to consult with a professional to take full advantage of any available tax breaks and credits and to make sure you're making the required payments and filings.

Local Zoning and Building Permits

In some cases—for instance, if you plan on building a new space or renovating an existing space—you'll need to apply for special zoning and building permits from your city or county. To get these permits, you usually have to go through a review process that typically involves submitting an application, attending meetings with city or town officials, and passing inspections.

For example, the City of Wilmington has different permit and license applications available on its website.

Depending on the work involved, you might also need to submit site plans or hire a professional architect or engineer. Sometimes, at the end of the process, if the city or county has signed off, you'll receive a clearance letter (or similar document) that allows you to start occupying your commercial space.

Talk to your local officials or visit your city or county website for information related to building permits and inspections. You can sometimes find an online application for the type of permit you need. Be sure to also review your local code and ordinances to figure out which zoning and building requirements apply to your business and planned operations.

Zoning laws. If your type of business isn't in line with the zoning code, you might need to look for another space for your business. Alternatively, you might be able to apply for a special use permit, which grants you an exception to the current use laws.

Building code. You can work with local departments and agencies to apply for building and construction permits. You'll likely need to have inspections related to your space's structural, electrical, mechanical, and plumbing features.

If you'd like to lease a commercial space, make sure you have a section in the commercial lease that ensures that the building and your use of the space are in line with the zoning laws.

Registering a Trade Name in Delaware

Any business that operates in Delaware under a trade name, business name, or fictitious name must register that name. If you use a trade name (also known as a "DBA"), then you must register it with the Office of the Prothonotary of every county where you'll do business. (Del. Code tit. 6, §§ 3101 and following (2024).)

Your business uses a trade name when it does business under a name that's different from its legal name:

• The legal name for a sole proprietor or a general partnership is all owners' full names.
• The legal name for a corporation or limited liability company (LLC) is the name registered with the DOC.

You can download the registration form from the Delaware courts website. The registration certificate must be notarized. As of 2024, the fee to register your trade name is $25.

For example, suppose Lin originally organized her car repair business as a Delaware corporation named Lin's Rehoboth Garage, Inc. Lin now wants to operate the business under the name "Beachside Foreign Auto Repair, Inc." Lin must file a notarized Registration of Trade, Business & Fictitious Name Certificate with the Prothonotary's Office in New Castle County, Kent County, and Sussex County.

For additional information on the requirements, check the Trade, Business & Fictitious Names section of the Delaware Superior Court website.

Other Licenses and Permits Your Business Might Need

Apart from the licenses and permits discussed above, your business might be required to comply with other laws and regulations at the federal, state, and local levels. For instance, your business could need to apply for special licensing or follow special rules related to:

• safety
• health, and
• the environment.

Sometimes, these regulatory areas are encompassed within other licenses, permits, and registrations. However, at other times, these licenses and permits will require a separate process. If you operate in a highly regulated field, you're more likely to need additional licenses and permits.

The requirements vary depending on the city or county involved. Look at the websites for the city and county where you'll operate your business for more information. Some businesses might be exempt from local licensing requirements under state or federal law.

Additional Information for Small Businesses in Delaware

The Delaware government website has a Get Your License webpage to help new business owners with federal, state, and local licensing requirements. The webpage has a checklist for opening a business in Delaware, including links to relevant departments and resources. You can also find checklists for the following types of businesses:

• food establishments
• general contractors
• gas stations
• auto dealers and repair shops
• dry cleaners, and
• salons and barber shops.

The U.S. Small Business Administration (SBA) has a district office in Wilmington. The office's website lists upcoming events, resources, SBA programs, and news for small businesses.

The Delaware Small Business Development Center (SBDC) has guidance on how to start and grow your business. The website has information on small business financing, training sessions, advisors, and affiliations with other organizations such as SCORE Delaware. The Delaware SBDC is part of a national network of SBDCs.

In addition to the great state resources, you can also find more information on the small business section of our website. If you want even more information, you can also read Legal Guide for Starting & Running a Small Business, by Fred S. Steingold (Nolo), and The Small Business Start-Up Kit, by Peri Pakroo (Nolo).

If you'd like more personalized, professional help, consider talking to a Delaware business attorney. Consider working with an attorney who has experience in your industry and is knowledgeable about the regulatory hurdles you might face.