What type of business entity should I form in Delaware?

For most small businesses, an LLC is the best choice. It costs $110 ($70 filing fee plus $40 courthouse municipality fee) to form in Delaware [§ 6-18-201], provides personal liability protection, and offers pass-through taxation. Corporations are better for businesses seeking outside investment or planning to go public.

How much does it cost to start a business in Delaware?

Basic costs include: LLC filing fee ($110 ($70 filing fee plus $40 courthouse municipality fee)) or corporation filing fee ($89)[src:https://corp.delaware.gov/|Delaware SoS], business license fees (varies by location), and EIN (free from IRS).

Do I need a business license in Delaware?

Delaware requires a state business license from the Division of Revenue for most businesses operating in the state; professional licenses from applicable boards [§ 30-2301]. Contact Delaware Division of Revenue; Division of Professional Regulation for specific requirements for your business type and location.

What are the annual requirements for my Delaware business?

Delaware LLCs pay an annual $400 flat tax, due on or before June 1, and are not required to file an annual report. [§ 6-18-1107]. You must also maintain good standing by paying required taxes and keeping your [def:registered agent] current.

OverviewUpdated 2026-02-27

Delaware Small Business Law Guide — Formation, Contracts & Compliance

Business formation, licensing, contracts, tax obligations, and regulatory compliance for small businesses in Delaware.

Jump to:

Business Formation — LLC, Corporation & More Business Contracts — Essential Agreements Business Compliance — Licensing, Taxes & Regulations Business Disputes — Resolution & Litigation Intellectual Property — Trademarks & Trade Secrets Small Business Employment Law — Hiring & Compliance

Starting and Running a Business

Starting a business means navigating a series of legal requirements — entity formation, state registrations, tax obligations, employment law, and contracts — each governed by different statutes and agencies. Getting the legal foundation right from the start protects your personal assets, keeps you in compliance, and prevents disputes that are far more expensive to fix later. Below is the general sequence from formation through ongoing operations, with the decision points that matter most.

💡

Business Idea

concept and planning

🏢

Entity Formation

LLC, corp, partnership

📜

Licensing

permits and registrations

⚙️

Operations

contracts and compliance

📈

Growth

scaling and expansion

If Issues Arise

⚖️

Dispute Resolution

mediation or litigation

🔄

Restructuring

changes or dissolution

🛡️

Business Protected

ongoing compliance

High-level illustration only. Requirements vary by jurisdiction, industry, and business structure.

Business Entity Types

	Filing Fee	Key Features
LLC	$110 ($70 filing fee plus $40 courthouse municipality fee)^{[Delaware SoS]}	Limited liability, flexible management, pass-through taxation
Corporation	$89^{[Delaware SoS]}	Formal structure, stock issuance, double taxation (unless S-corp)
Sole Proprietorship	No state filing	Simplest, no liability protection
Partnership	Varies	Shared management, personal liability (unless LP/LLP)

Key Requirements in Delaware

Choose and register your business entity with Delaware Division of Corporations, Department of State §6-18-201

Obtain an EIN from the IRS

Register for state taxes (No sales tax; corporate income tax (8.7%); gross receipts tax on businesses; no personal property tax; LLC annual flat tax ($400); famously business-friendly Court of Chancery)

Obtain required business licenses — Delaware requires a state business license from the Division of Revenue for most businesses operating in the state §30-2301

Comply with employment laws if hiring (workers' comp required for 1 or more employees)^{[DOL Workers' Comp]}

File required annual/periodic reports §6-18-1107

Tax Structure

No sales tax; corporate income tax (8.7%); gross receipts tax on businesses; no personal property tax; LLC annual flat tax ($400); famously business-friendly Court of Chancery.

Resolving Business Disputes

Delaware Court of Chancery — world-renowned specialized business court with extensive corporate law precedent and expert judges. Small claims court in Delaware handles disputes up to $25,000 §10-9301.

✓Form your business entity before starting operations to protect your personal assets. Even a single-member LLC provides liability protection that a sole proprietorship does not.

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Common Questions