What Business Licenses & Permits are Needed in Delaware?
Starting a business in Delaware will mean potentially registering with a number of federal, state, and local agencies. Let’s take a look at common licenses and permits a business will register for in the state of Delaware.
Before applying for any licenses, the legal structure of the business will need to be established. Learn more about the differences between the sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC)
Related: Comparison of Business Entity Types
Also see: Steps to Starting a Business in Delaware
Delaware State Business License
Every person or entity conducting a trade or business in Delaware is required to obtain a business license from the Delaware Division of Revenue. The Delaware Business License can be applied online through the Delaware One Stop Business Licensing and Registration Service or on paper form CRA (Combined Registration Application).
Even though Delaware does not impose a state sales tax; however, there is gross receipts tax for most businesses. The CRA form outlines the rate and allowable exclusion in more detail.
The average filing fee for a Delaware Business License is $75 for the first location and will take between 2 weeks and a month to receive it.
City Business Licenses
In addition to the State Business License, many Cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.
Wilmington – Businesses operating within City limits need to obtain a Wilmington Business License from the Business License Division. The City of Wilmington requires a City Business License for businesses operating within City limits.
Wilmington Business License fees vary by industry, with costs averaging between $120 and $180.
Dover – The City of Dover requires a business license for several types of businesses, including; barbers, contractor, day care, shoe repairman, and many others
Newark – Businesses operating in the City of Newark are required to get a business license.
Middletown – The Town of Middletown requires all businesses and contractors to get a business license. Business License costs vary depending on what the business does but range between $125 for a contractor to $250 for a barber with three or more locations.
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Building & Zoning Permits
Zoning – Depending on the location of the business, it’s important to verify whether the business needs an occupancy permit or has specific zoning regulations to follow. Depending on city requirements, home-based businesses may need to apply for a home occupation permit.
Building Permit – A building permit may be needed from the city or county building and planning department if there is any construction or renovations to a facility.
Signage Permit – Some municipalities require a permit before adding signage.
Occupational License – A variety of occupations and professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Delaware include; accountants, cosmetologists, gun dealers, appraisers, and many more. Additional information, fees, and licensing requirements for professions are available from the Delaware Division of Professional Regulation.
To become a state licensed general contractor in Delaware, the process will be run through the Delaware Department of Revenue. Contractors are defined as individuals engaged in the business of furnishing labor or both labor and materials in connection with all or any part of construction, alteration, repairing, dismantling, or demolition of buildings, roads, bridges, viaducts, sewers, water, and gas mains and every other type of structure as an improvement, alteration or development of real property.
The state of Delaware has two different licenses for contractors – the Resident Contractors License or Non-Resident Contractor License. Registration is through the Delaware Division of Revenue
Employer Identification Number (EIN)
Many businesses will register with the Internal Revenue Service (IRS) for an EIN (or FEIN or Federal Employer Identification Number). The EIN is the business equivalent for a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships, and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.
There is no cost for an EIN, and it only takes a few minutes to get.
Assumed Name Registration
While not a business license, Sole Proprietorships and Partnerships operating under a name that is different from the full name of the owner(s) must register for an Assumed Name (also known as a Doing Business As, DBA, Fictitious Name, or Trade Name) with the Prothonotary’s Office in the counties where you plan to transact business.
These are some of the most common business licenses, but there are far too many licenses and permits for us to keep track of. Before starting your business, be sure to check with City Hall, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.