Starting a business is more than just an idea—it's a journey that requires a lot of planning and hard work. We at .inc know the ins and outs of the business world. So to make the process a little easier for you, we've put together ten easy steps to get your business up and running in Delaware.
Step 1: Choose a Business Idea
To begin with, you need to come up with a business idea—one that's viable, relevant, and useful. Here are some of the steps to consider.
- Brainstorming is key; think about the services you can provide, what sort of products are in demand in your area, and even consider consulting opportunities.
- Demographics are another factor to consider when choosing a business idea. Research your target market, and decide whether there's a need for what you're offering.
- Consider whether you can establish a location for your business. If not, you may want to choose a business idea that can be operated online.
- Evaluate whether your business idea is feasible under the laws and regulations of Delaware.
- Lastly, have a solid plan in place to finance your business.
Step 2: Decide on a Legal Structure for Your Business in Delaware
Choosing the right legal structure for your business in Delaware is vital to its success. Research all of the options available, analyze your business needs and understand the legal implications of each option before making a decision. Understand which entity can provide limited liability protection and tax benefits to ensure you make the best choice for your business.
The type of business you operate, the number of owners and investors, and other factors can influence which business structure is right for you in Delaware. Once you select a business structure, some formalities come with it, such as filing articles of organization with the state government and obtaining licenses and permits to do business. Here are the types of legal structures available in Delaware:
- Sole Proprietorship
- General Partnership
- Limited Liability Company (LLC)
- C-Corporation
- S-Corporation
Step 3: Choose a Business Name
We can't emphasize the importance of a business name enough. A name establishes a first impression, sets expectations, and can help differentiate your business from the competition. It should be memorable, easy to pronounce, and unique.
A less discussed factor in choosing a business name is branding. It needs to have a lasting impact and be visually appealing. Consider whether the name can be used in different mediums, such as logos and digital campaigns. Once you decide on a business name, make sure it's available for use in Delaware by conducting a search on the Secretary of State's website.
Legal Considerations
- If you want to form an LLC or corporation in Delaware, first check that your desired business name isn't already taken by searching the Delaware Division of Corporations (DOC) website. If it's available, you can reserve it for 120 days by filing a Name Reservation Application online or on paper.
- Not only can you apply for a name reservation, but you can renew the reservation after it expires. Just be mindful of the requirements for different types of businesses; for example, LLCs must include "LLC" in their name, whereas corporations need to have "Company" somewhere in theirs.
Step 4: Secure Your Business's Online Presence
Having an online presence is crucial for any business to reach its goals. By setting up a website, you can open the door and connect with customers while fostering loyalty from those already on board. Here are some helpful tricks to take your enterprise's success into cyberspace:
- Choosing a domain extension is critical. When selecting a domain name for your company website, make sure to give it an extra boost of credibility and trustworthiness with the .inc extension. This TLD is specially designed to add a professional touch that will help your business stand out from the competition.
- Give your website visitors a smooth mobile experience with all the essential details they need to know, like contact info, products/services available, and what other customers have said.
- Having a blog for your business is an amazing way to demonstrate your expertise and bring value with up-to-date information. Show off what makes you the knowledgeable go-to in your field.
- When you're ready, unlock the potential of social media platforms like Twitter, Facebook, LinkedIn, and Instagram to magnify your audience.
- Taking your business online is a great way to make yourself stand out from the competition. To do this effectively, you need to know who you're talking to - are they internet newcomers or experienced pros? Keeping their level of knowledge in mind will ensure that whatever presence you create speaks directly and engages with them on their terms.
Step 5: Establish Your Business Entity in Delaware
Sole Proprietorship
Establishing yourself as a sole proprietor in Delaware is easy - no official documentation of your structure needs to be filed! All you need to do is get permission from the state by obtaining a business license.
Partnership
Creating a partnership in Delaware is relatively easy and straightforward. You don't need to file any official paperwork with the state, but obtaining a business license may be necessary depending on what type of venture you plan to launch. For peace-of-mind sake, though, partners should always have an agreement that outlines each person's rights and responsibilities - especially when more than two people are involved. In addition, if forming a limited liability partnership (which many professionals choose), then filing for qualification at the Delaware Department of Commerce could also provide extra security if faced with disputes or misunderstandings between parties.
LLCs
If you're looking to get your Delaware LLC up and running, there are a few key steps you'll need to take. First is submitting the Certificate of Formation with the Delaware DOC – this one's required by law. Next, appointing a registered agent in DE for service purposes; although not mandatory, it can be very helpful down the line! Finally (although optional), consider preparing an operating agreement—this establishes guidelines so everyone involved knows exactly what to expect from their involvement in your business entity.
Corporations
If you're looking to create a corporation in Delaware, the process can be made much simpler with some advanced preparation. Submitting your Certificate of Incorporation to the appropriate state office is non-negotiable – but not only that: appointing an agent for service of process and preparing bylaws (although not legally required) will help establish internal operating rules right off the bat! And don't forget that S corporations must also file IRS Form 2553 - Election by a Small Business Corporation - when ready.
Step 6: Apply for Licenses and Permits
Establishing your business is the first step, but don't forget to obtain all necessary licenses and permits. Depending on what you do and how large it grows, that could include a range of government agencies, from local governments up to federal authorities.
- For example, if you want to sell food items either online or in a brick-and-mortar establishment, then you need to first get a license from the Delaware Department of Agriculture. Another crucial step is getting an Employer Identification Number (EIN) from the IRS if you're planning on hiring other people for your business. Lastly, don't forget to apply for a Business License from the county where your business will be based.
- Different businesses have different requirements and regulations depending on the industry and location. Make sure you don't get any costly fines or penalties by taking the time to register your business and get the proper licenses.
- It is also essential to set up a system for keeping records to stay organized and comply with legal requirements. In addition, accurate records will help you make informed decisions about the future of your business.
Step 7: Find a Business Location
Undertaking due diligence when selecting the optimal business location is critical for any enterprise, especially those planning to establish a new Delaware office. There are many advantages that come from taking a systematic approach to finding the best possible site, as some key factors may not be immediately apparent. For example, depending on the type of industry, a particular location could provide access to larger markets and customer bases – which would be a boon for companies aiming to expand their reach.
To decide on the best site for your business in Delaware, please keep in mind various local and state economic climates as well as regulations that might alter how you conduct transactions or operate. These are just a few reasons why making this choice is so important and should not be done haphazardly.
Step 8: Filing and Reporting Taxes in Delaware
Filing and reporting taxes as a business in Delaware requires dedication to understanding the rules set by the Internal Revenue Service (IRS). The Internal Revenue Service (IRS) outlines that businesses based in the state of Delaware adhere to special regulations when it comes to filing Federal, state, and local income tax returns. In addition, Delaware has other taxes related to corporations which include annual franchise fees and corporate income taxes.
Employers must submit quarterly contributions and wage reports to keep track of payroll taxes. Businesses in Delaware are responsible for remaining compliant with all tax regulations, as delinquency of payments could result in costly penalties and interest charges.
Step 9: Obtain Business Insurance in Delaware
Delaware business owners can safeguard their company's finances by getting business insurance. This type of coverage promises that any unforeseen losses or liabilities are paid for, offering peace of mind and shielding against substantial income reductions. Also, corporate insurance policies in Delaware come with a host of protections, permitting entrepreneurs to personalize their coverage to best match the requirements of their respective businesses.
If you want to get business insurance in this state, reach out to an experienced broker who can tell you what coverage plan works best for your company.
Step 10: Open a Business Bank Account
A business bank account is an essential step for any company. By opening a business bank account, your organization will have increased financial security, more interest rate options, and other advantages not accessible to personal accounts. Businesses in Delaware should choose an appropriate bank and provide the paperwork for start-up costs.
Business owners should research various banking options before settling on a financial institution. In addition, it is essential to understand each provider's services, interest rates, and other fees associated with business accounts.
