Tips On Starting A Business In Delaware
Delaware, the second smallest state in America, is also the preferred home to 60% of the company’s on the Fortune 500 and the preferred home of many companies from around the world. There are many reasons why Delaware is so popular. The primary reason for starting a business is that Delaware is the best state in the United States in terms of giving managers the flexibility to run their businesses, while allowing investors to hold those managers accountable. This is why it has been the number one state for business formation for over a century. In this article, we will go through a few tips on starting a business in Delaware.
Choose a Business Structure
You need to choose a business structure. There are various kinds of business structures and each has a unique income tax return form that has to be filed. The most common business structures are Sole Proprietorships, Partnerships, Corporations, S Corporations, and the Limited Liability Company (LLC). Not only does the business structure determine your income tax returns, it also impacts your ability to fundraise, and the degree of personal liability that the owners assume.
The Delaware Division of Revenue has a helpful Legal Business Structure Table and Registration Process Flow Chart that you can consult. If you plan on conducting business in Delaware or hiring employees there, you should also visit the State’s One Stop Business Registration and Licensing System.
Get a Registered Agent
According to state law, you need to obtain and maintain a registered agent in Delaware. A registered agent may either be an individual or a business entity that is authorized to conduct business in the state. Your registered agent must have a physical address in the state. You can consult a list of Delaware Registered Agents before choosing on the right registered agent for your Delaware business. If your business has a physical presence in the state, it can act as its own registered agent. If your business is not acting as its own registered agent, you should consult the registered agent you used when forming your business and tell them about your desire to start a business in Delaware. This is assuming you are not starting your business from scratch but merely expanding into Delaware.
Register Your Business
The next step is to register your business with Delaware. In many instances, you will also need a a tax ID number and file for any licenses and permits you will need. The process of registering your business begins with reserving a business name. You can reserve a business name for 120 days for a fee of $75. Name reservation is not mandatory.
You will then need to obtain a certificate of incorporation/formation forms. These can be submitted via Delaware’s Document Upload Service or mailed in to the Division of Corporations -John G. Townsend Building – 401 Federal Street – Suite 4 – Dover, DE 19901. All submissions must be accompanied by the appropriate filing fees.
Once you have done this, you just have to wait for your submission to be processed. If necessary, you may also need to get an Employee Identification Number (EIN).