How to Start a Business in Delaware
Everything you need to form your Delaware LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Delaware is an attractive place to incorporate because of its combination of low formation costs and favorable tax structure. An LLC costs $110 to form and then owes a flat $300 annual tax with no annual report requirement. The state has no sales tax; instead, businesses pay a gross receipts tax of roughly 0.0945% to 1.9914% depending on business type, after a monthly exclusion commonly set at $100,000.
This guide covers every step of starting a business in Delaware, from choosing between an LLC and a corporation to obtaining your business license.
Choosing Your Delaware Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Delaware small businesses.
| Entity Type | Liability Protection | Taxation | Delaware Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $110 | Flat $300 annual tax due June 1 each year following the... | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $109 | $50 Annual Franchise Tax Report | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Delaware Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Delaware Division of Corporations, Delaware Department of State database. Reserve for $75 (120 days).
- 3
Appoint a registered agent
Must have a physical Delaware street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Certificate of Formation of a Limited Liability Company (6 Del. C. Section 18-201) ($110) or Certificate of Incorporation (8 Del. C. Section 102) ($109) with the Delaware Division of Corporations, Delaware Department of State.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Delaware Division of Revenue, Department of Finance. State sales tax rate: none.
- 7
Get required licenses and permits
Yes. Any person or entity conducting a trade or business in Delaware must obtain a Delaware business license from the Division of Revenue, applied for through Delaware One Stop.
- 8
Register for Delaware taxes
Personal income tax: Graduated from 2.2% to 5.55% on taxable income under $60,000, and 6.60% on taxable income of $60,000 or more.
How Much Does It Cost to Start a Business in Delaware?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Delaware Division of Corporations, Delaware Department of State) Required | $110 | The Division does not publish a standard turnaround for routine filings and states that processing times vary with the... |
| Corporation filing fee Required | $109 | If forming a corporation instead |
| Annual report | $0 | Not required in Delaware |
| Name reservation | $75 | 120 days |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Yes. Any person or entity conducting a trade or business in Delaware must obtain a Delaware business license from the... |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $110 to $410 |
Start a Specific Business in Delaware
Delaware Business Guides
- How to Start an LLC in Delaware
- How to Start a Corporation in Delaware
- Sole Proprietorship in Delaware: How to Start One
- Delaware Business License: What You Need and How to Get It
- Delaware Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Delaware
- Delaware Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Delaware
- Delaware Registered Agent: Requirements and How to Choose One
- Best LLC Services in Delaware
- Delaware Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Delaware
Why Start a Business in Delaware?
- More than 2,000,000 business entities are registered in Delaware, and more than 66% of Fortune 500 companies use it as their legal home.
- Delaware imposes no state or local sales tax; businesses instead pay a gross receipts tax of about 0.0945% to 1.9914% depending on activity, after a monthly exclusion that is commonly $100,000.
- An LLC costs $110 to form on the state fee schedule and then owes a flat $300 annual tax due June 1, with no annual report to file.
- A corporation costs $109 minimum to incorporate, then pays a $50 annual report fee plus franchise tax starting at $175 under the authorized shares method, due March 1.
- Personal income tax is graduated from 2.2% to a top rate of 6.60% at $60,000 of taxable income, and corporate income tax is 8.7% on income apportioned to Delaware.
- The state had 1,059,952 residents as of July 1, 2025 and about $117.2 billion of GDP in 2025, 42nd among the 50 states, with finance and insurance alone at roughly 26% of state GDP.
Delaware Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Delaware?
- The Division of Corporations does not publish a standard processing time, and turnaround varies with filing volume. Same day service is available for $100, and expedited one hour service for $1,000.
- What does it cost to start an LLC in Delaware in year one?
- An LLC formation costs $110, and you must obtain a business license, which costs $75 per year for most business types, for a total of $185 in year one startup costs. The $300 annual tax is due June 1 of the following year.
- Can a non-resident form a Delaware LLC?
- Yes, non-residents can form a Delaware LLC. The entire formation process is conducted online through the eCorp Document Upload Service, and Delaware has no residency requirement for incorporation.
- What is the cheapest way to start a business in Delaware?
- An LLC is the cheapest way to start a business in Delaware. Formation costs $110 and a required business license costs $75, totaling $185 in startup costs, with the $300 annual tax due June 1 of the following year.
- Is an operating agreement required for a Delaware LLC?
- Delaware does not legally require an operating agreement for an LLC. However, one is recommended to establish each member's ownership percentage, management rights, and how profits will be distributed.