Starting a service business in Delaware

Form your business in Delaware

File a Certificate of Formation with the Delaware Division of Corporations. The filing fee for a domestic LLC is $110 on the Division's August 2026 fee schedule, as listed in October 2026; expedited service costs extra. Forming the LLC does not license it to operate in the state: once formed, register with the Division of Revenue for a business license through Delaware One Stop.

Ongoing state filings

Delaware LLCs do not file an annual report. Instead, the Division of Corporations requires every LLC formed or registered in Delaware to pay an annual tax of $400, as listed in October 2026, due on or before June 1 for the prior year. Missing it brings a $200 penalty plus 1.5% interest per month on the tax and penalty, and the tax is not prorated: it is owed for any year the LLC is active in the Division's records at any point from January 1 through December 31.

Using a business name (DBA)

As of February 2, 2026, the Division of Revenue runs Delaware's statewide DBA registry through Delaware One Stop, replacing filings with each county's Prothonotary. Registration is online, no longer needs a notary, and costs $25 as listed in October 2026, covering the whole state instead of one county. You must hold a Delaware business license to register a DBA. Names registered with the Prothonotary before February 2, 2026 remain valid and can be moved to the new registry at no cost using the old court file number.

Not sure whether you need an LLC at all? Read LLC vs sole proprietor for contractors, then get your free EIN from the IRS.

Licensing for service trades

Delaware licenses several layers. Every business conducting business in the state needs a Division of Revenue business license, and the Division's contractor tax tips set it at $75 a year, renewed by December 31; its definition of contractor covers anyone furnishing labor, or labor and materials, for construction, alteration or repair of real property, with painters, carpenters, electricians, plumbers and home builders among its examples. Construction service businesses must also register with the Department of Labor's Office of Contractor Registration before beginning work in the state. Individual trade licenses for electricians, and for plumbing, heating, ventilation, air conditioning and refrigeration, come from boards in the Division of Professional Regulation. Towns and cities may add their own permits and licenses.

• Delaware Division of Revenue: Contractors: Business license for resident and non-resident contractors; gross receipts tax
• Delaware Department of Labor: Construction contractor registration: Registration required for construction service businesses before beginning work
• Delaware Board of Electrical Examiners: Electrician licensing
• Delaware Board of Plumbing, Heating, Ventilation, Air Conditioning and Refrigeration Examiners: Plumbing and HVACR licensing

Workers' compensation

The Office of Workers' Compensation in the Department of Labor's Division of Industrial Affairs says all employers with one or more employees must carry workers' compensation insurance through a licensed carrier or an approved self-insurance program, and employees are generally covered from their first day. Employers pay the full cost; nothing comes out of wages. Exemptions such as certain farm workers, independent contractors and casual employees are set out in 19 Del. C. §§ 2307 and 2308. If an employee is hurt, you must file a First Report of Occupational Injury or Disease within 10 days of being notified. Delaware also requires employers to be represented by an attorney at a formal Industrial Accident Board hearing, which your carrier normally provides.

More on coverage: business insurance for contractors.

Sales tax on services

The tax that matters for a Delaware service business is the gross receipts tax, which the Division of Revenue describes as a tax on the total gross revenues of a business, levied on the seller of goods or services rather than the consumer. There are no deductions for materials, labor or other costs, but most business types get a monthly exclusion; for contractors and general services the first $100,000 a month is excluded. The Division's current rate list shows 0.6472% for contractors and 0.3983% for general services, as listed in October 2026. Contractors may exclude amounts paid to subcontractors who supplied construction labor, by attaching Form 1280. New licensees file quarterly through their first calendar year.

Recording business calls in Delaware

Delaware's two statutes point different ways. The wiretap law, 11 Del. C. § 2402(c)(4), allows a person who is a party to a call, or has one party's prior consent, to intercept it. But the privacy statute, 11 Del. C. § 1335(a)(4), makes it an offense to intercept a private telephone message or conversation without the consent of all parties. Until a court settles it for your situation, get everyone's consent with a recorded notice at the start of each call; see our call recording guide.

See our guide to recording business calls before you turn on call recording or an AI receptionist.

How the seasons shape the work

Delaware is small, but its seasons split by geography. Beach towns in Sussex County run on a summer rental season, with turnover cleaning, pressure washing and quick repairs crowded between Saturday checkouts and check-ins, while coastal storms and nor'easters bring flooding and wind damage in fall and winter. Upstate around Wilmington and Newark, snow and ice events in winter and leaf season in fall drive plowing, gutter and cleanup work.

Out-of-state contractors post a bond

The Division of Revenue requires non-resident contractors to post a surety or cash bond equal to 6% of the total of all contracts over $20,000 for construction in Delaware. A Delaware general contractor that hires a non-resident subcontractor must report the contract to the state on Form 5060 within 10 days, with civil penalties of up to $10,000 per occurrence for failing to comply.

Then set up the back end that gets you hired

The paperwork makes you legal. Customers still have to find you, reach you and pay you. Before your first job, set up a business phone number, email on your own domain, a Google Business Profile, a simple website, and a way to send quotes and take card payments. The launch checklist lays out the order.

Delaware questions