Delaware is business-friendly, but starting a small business there still requires obtaining appropriate licenses and permits. Business owners often need clarification when figuring out what business licenses they need in Delaware, so keep reading to learn everything you need to know.
Delaware Business License: Key Takeaways
Businesses in Delaware need various licenses and permits, including a general business license from the Delaware Division of Revenue.
License requirements in Delaware vary based on the industry and location of your business.
Most Delaware business licenses must be renewed regularly, typically annually. Failure to obtain and maintain proper licenses can result in fines or business dissolution.
What Is a Business License?
The idea of a business license is relatively simple. It’s a business document that allows you to carry out certain business activities. If your business is in a highly regulated industry, such as alcoholic beverages, you will likely face extensive licensing requirements.
Your small business may be required to obtain a state license from the state of Delaware or a local permit from your city or county government. Suppose your business operations involve an industry regulated at the federal level. In that case, you’ll also need a license from the federal government.
It’s important to note that applying for a business license differs from forming a business entity. You should apply for appropriate business licenses after business registration and once you have created your legal entity (e.g., a limited liability company/LLC) with the Delaware Secretary of State.
Get Your Delaware Business License in 7 Steps
Navigating Delaware business license requirements can feel daunting at first. Whether you’re talking about state licenses or occupational tax certificates, federal, state, and local regulations exist, and some business owners need help finding relevant information. Read on to learn about the steps you need to take.
Step 1: Apply for Delaware General Business Licenses
Regardless of what you do, all businesses operating in Delaware must obtain a general business license from the Delaware Division of Revenue. Your small business can’t start operating without this type of business license. You can get more information on Delaware’s official website, delaware.gov.
In addition to the general business license, you may be required to obtain additional state licenses, a professional license, or permits from your local government. Most businesses in Delaware hold more than one business license.
Step 2: Apply for Federal Licenses for Delaware Businesses
The federal government extensively regulates specific industries. You must obtain a federal business license if your new business falls into one of these federally regulated industries.
You can use the table below to determine whether your business needs a federal license.[1]
Business Industry
Business Activities
Responsible Agency
Agriculture
Importation or transportation of animals, animal products, biologics, biotechnology, or plants across state lines
Department of Agriculture
Alcoholic beverages
Manufacture, wholesale, import, and sale
Alcohol and Tobacco Tax and Trade Bureau and Local Alcohol Beverage Control Board
Aviation
Operation of aircraft, transportation of goods or people via air, and aircraft maintenance
Federal Aviation Administration
Firearms, ammunition, and explosives
Manufacture, dealing, or import
Bureau of Alcohol, Tobacco, Firearms and Explosives
Fish and wildlife
Import and export of wildlife and derivative products
US Fish and Wildlife Service
Commercial fishing
All kinds
National Oceanic and Atmospheric Administration Fisheries Service
Maritime transportation
Transportation or facilitation of shipment of cargo by sea
Federal Maritime Commission
Mining and drilling
Mining and drilling for natural gas, oil, or other natural resources on federal lands
Bureau of Safety and Environmental Enforcement
Nuclear energy
Commercial production, fuel cycle facility, or distribution and disposal of nuclear materials
US Nuclear Regulatory Commission
Radio and television broadcasting
Radio, television, wire, satellite, or cable
Federal Communications Commission
Transportation and logistics
Operation of an oversized or overweight vehicle
US Department of Transportation
The Small Business Administration website has more information for business owners on obtaining appropriate federal licenses for their business.
Remember that applying for a federal license doesn’t mean you can skip applying for state or local licenses, even if they focus on the same industry. Specific industries require federal, state, and local business licenses.
Step 3: Search for Delaware Permits and Licenses
In addition to obtaining a general business license, you’ll need to take a few additional steps to keep your business in good standing with the State of Delaware.[2]
All businesses must obtain an Employer Identification Number (EIN) from the IRS. The only exception to this is if you’re a sole proprietor with no employees.
If you have employees, you must register with the Delaware Division of Unemployment Insurance and the Delaware Office of Workers’ Compensation.
Limited liability companies, corporations, and partnerships must register with the Delaware Division of Corporations.
Depending on your industry, you must obtain additional licenses to satisfy state requirements.
For example, if you manufacture, sell, or serve alcoholic beverages, you’ll need a liquor license. You’ll also need a state license if you’re involved in telemarketing, run a childcare facility, or have a restaurant. Those in the construction industry may need building permits. You can access the complete list of required state licenses here.
The easiest way to obtain state licenses for your business is by visiting Delaware’s One Stop Business Licensing and Registration Service.
Step 4: Search for Local County or City Delaware Business Licenses
Your city, municipality, or county might require additional licenses and permits beyond federal and state requirements. You may need a general business license, a professional license, a sales tax permit, a zoning ordinance, or a business tax permit — and this is not an exhaustive list.
For example, you’ll need a general business license to operate your business in Wilmington. You may also need to complete a vendor application to conduct business with the city.[3]
The city of Dover also has extensive licensing requirements. You’ll need to apply for a business license if you’re a barber, a consultant, a manicurist, a motel, a business with employees, and more.[4]
Finding all the information you need on local business licenses online can be challenging. When in doubt, contact your city’s local tax office or another local government office.
Step 5: Search for Delaware Professional Licenses
You may need a professional license if your profession requires extensive education or training credentials. The official website of the State of Delaware has a comprehensive index of occupations that need to obtain additional licenses. Examples include:
Attorneys
Barbers
Cosmetologists
Deadly weapon dealers
Marriage and family therapists
Real estate agents
You may need to apply for a professional license at the state and local levels.
Step 6: Apply for a Delaware Home-Based Business License
Running your new business from home comes with great perks, such as not having to commute to work. However, depending on your business location, you may need to apply for a home occupation license or a zoning permit for your small business.
There’s no home-based business license requirement at the state level. Still, depending on the type of business you run and your local laws, you may need to obtain an additional license to operate your business from home. A childcare facility is an example of a home-based business that almost always faces extensive licensing requirements.
Step 7: Maintain Your Delaware Business License
Most business licenses must be renewed regularly to stay in good standing. Generally speaking, business owners in the State of Delaware need to renew their business licenses every year, but some licenses may need to be renewed more or less often. State agencies and your local government might have different requirements.
If you don’t want to deal with extensive paperwork every year, Swyft Filings can help. Just answer a few questions about your business, and we’ll easily keep your business licenses and permits up to date and in compliance with the law.
Apply for a Delaware Business License Online
A lot goes into obtaining proper business licenses for your new business. Most small businesses will need several different licenses and permits, and it’s easy for business owners to get overwhelmed while researching other requirements.
Suppose you want to eliminate the headache and have more time to focus on growing your business. In that case, Swyft Filings can apply for Delaware business licenses for you. We’ll carefully research what type of licenses and permits your business needs at the federal, state, and local levels and file appropriate business license applications correctly and swiftly.
FAQs
How do I get a business license in Delaware?
It would be best if you started by researching the business licenses your small business needs. You may need to obtain a permit from the federal government, a state agency, your local government, or a combination of all three. Most businesses will need several licenses and permits. If you’re confused, Swyft Filings can help.
Does Delaware require a general business license?
Yes, Delaware requires all businesses to apply for a general business license. You can go through the Delaware OneStop website.
In addition to the general business license, you may also need an industry-specific license (for example, a liquor license), a professional license, or a local license issued by your city or county.
Can you sell things in Delaware without a license?
No. You need a business license if you conduct any business activity in Delaware.
Do I need a special license for an online business in Delaware?
You don’t need a unique online business license in Delaware. Still, you do need to comply with the standard business license requirements all businesses face. This includes obtaining a general business license and any other appropriate local and state licenses for your business.
Can I collect sales tax in Delaware without a license?
Delaware doesn’t have a sales tax. However, you will have to file and pay what is known as the gross receipts tax.
How much does a Delaware business license cost?
A Delaware general business license costs $75/year for a first location and $25/year for each additional location.[5] The costs of other state and local licenses vary and can range from $20 to a couple hundred dollars.
What’s the penalty for not having a business license in Delaware?
Suppose you don’t obtain proper business licenses for your business. In that case, you may need to pay fines or even cease your business operations.
Bibliography
US Small Business Administration. “Apply for licenses and permits.” Accessed June 5, 2023.
The Official Website of the State of Delaware. “Business Licenses FAQs.” Accessed June 10, 2023.
The Official Website of the City of Wilmington. “Doing Business in the City of Wilmington.” Accessed June 10, 2023.
The Official Website of the City of Dover. “Application for Business License.” Accessed June 10, 2023.
Delaware.gov. “Step 2: Requirements for Delaware Businesses.” Accessed June 10, 2023.