Delaware Business License
Delaware Business License
The first step form an LLC or incorporate your business is to identify the type of business you want to start or pursue. In the state of Delaware, a business license is required and you will need to apply for same prior to forming an LLC or corporation. The important question is where do you begin and what are the procedures?
The Need for Delaware State Business License
Delaware is considered one of the top states in the country that provides a positive and highly lucrative business environment for small and medium enterprises (SMEs). This is more so because of several advantages including low franchise tax for all types of small businesses, no Delaware sales tax, Court of Chancery that greatly minimizes cost, time, and risk of any commercial litigation, and a high level of privacy among others.
In order to set up your company, a business license in Delaware is a must. According to the Division of Revenue, State of Delaware, “Any person or entity conducting a trade or business in the State of Delaware is required to obtain a Delaware state business license from the Delaware Division of Revenue.”
This includes any entity located in the state that conducts business outside Delaware.
How to Obtain Delaware State Business License
How and where do you get your Delaware company license from? You can obtain your Delaware state business license by completing an online registration form here. This is a service that allows the simultaneous registration with other federal and state entities.
There is a second option available, which is to download the Combined Registration Application (CRA) form. This form is a combined registration application for state of Delaware state business license and/or withholding agent. The CRA form also contains “Special Requirements” for Contractors form that has to be filled by both Resident and Non-Resident Contractors. Upon completion, you can mail it to DIVISION OF REVENUE, P.O. BOX 8750, WILMINGTON, DE 19899-8750.
The time taken to process business license in Delaware is almost a month after you have registered or mailed the CRA form to Delaware Division of Revenue. If you apply online then you have the option of printing a temporary license after the CRA submission or license registration process is complete. Online applicants normally receive their permanent licenses within a period of 10 days.
Types of Business License in Delaware
There are different requirements for Delaware company license and it varies according to the type of business and business activity being conducted by you. The most common type of Delaware state licenses issued include:
- Liquor & alcohol licenses
- Cigarette & tobacco licenses
- Professional licenses
- Contractors licenses
- Firearm related licenses
- Gambling & lottery licenses
You will need to renew your business license in Delaware each year on 31 December, or on the date when it was issued initially under the provision of Delaware Code § 516(g) and § 2216 of Title 13. The annual fee varies according to the type of business but the standard fee for a first location is $75.00.
When your state business license is due for renewal, you can also go with an optional 3 year renewal. Opting for a 3-year renewal means you will be required to pay a license fee that is equal to 3 times the standard fee for the business type or category your company falls under.
You can also take advantage of the senior citizen discount of 75% on your annual license fee if you are 65 years of age or older on or before 1st January in the current license year. There are specific requirements that businesses have to meet in order to be eligible for the senior citizen discount.
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Note: If there is any change in the legal entity of your business, like a sole proprietorship becoming a C corporation, you will require a new business license in Delaware. It will be your responsibility as a business owner to inform Delaware Business License Department regarding this change of legal entity.