How to Start a DBA in Delaware
Are you ready to start a DBA in Delaware? There are no state taxes in this northeastern state. Plus, it has an excellent healthcare system and award-winning beaches. It is a state of high industry but has many hamlets that offer a lot to smaller shops. It pays to check out how Delaware handles those wanting to conduct business as a DBA before you open up. We’ve created a guide that gives you all the information you need to get started, along with tips and links to crucial forms.
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What is a DBA?
The acronym of DBA means “doing business as.” The DBA meaning refers to when a company operates under a different name other than its legal name listed on state and federal forms. It’s legal to do business as a DBA in every state, but each, like Delaware, has its own laws about things like registration of the name and taxes.
Some states refer to a DBA as a fictitious business name, assumed name, or an alias name used for a company name. Some use the DBA name other than the legal name or your own name for various reasons. Using a DBA can offer some legal protections and tax advantages to sole proprietors, a limited liability company (LLC), and general partnerships.
How to search DBA names in Delaware
A standard rule for choosing business names is that businesses should have unique names, and Delaware requires all DBAs to be a unique name from other businesses. It’s best for marketing and other purposes if your business name is a different name from other businesses.
Those starting a DBA must check for name availability against all registered names to be assured they are choosing a unique name. The best place to start that search is with the Delaware Division of Corporations office, but you can also double-check local DBA names against business licenses at the county clerk’s office.
You may need to check several places as some holding general licenses may have the same name. Another place to check for trademarks is the U.S. Patent and Trade Mark Office.
Go to the Delaware Division of Corporations page
Once you are on the Division of Corporations page, look for the free tool to check corporate entity name availability. Put your name proposal into the entity box. You can check as many names as you want.
Review your search results
A list of businesses with exact or similar names will be generated. It will show you registered business entities like LLCs or corporations. It may not show you DBAs because those are registered with the country rather than at the state level. However, the courts also have a free tool to check for DBA, trade names, or fictitious names.
Register a name you like
You will need to contact or go to your local county office in Delaware to register your DBA name when you find one you like. Registrations are done in the prothonotaries’ office in the county. The filing information is sent by the county to the Delaware Secretary of State’s office.
Have a name in mind? Check on name availability first here.
How to register a DBA in Delaware
Delaware handles DBA registrations on a county level. Every county can have different requirements and fees but most of the forms are similar since they all send the filings to the Secretary of State.
Those who want to file a trademark may also want to consult an attorney to ensure the process is done legally and properly. Trademarks are a different category than trade names and can be complicated to protect.
Contact the county where you plan to do business
Delaware requires that businesses register their trade names in every county where they plan to conduct business. You will need to check with county clerks about requirements and fees.
Fill out the proper paperwork
Each county has a form you need to fill out. In some cases, you may need to have it notarized. Each office has a notary if you wish to use them. Just be sure to sign the form in their presence.
Pay the fee
Delaware accepts checks or money orders for DBA filings
Get answers to your questions
Those with questions can start here to find answers. You can also ask your county clerk questions about starting a business in their area. Many have FAQ pages on their websites so navigate to your town’s website to see if answers can be found there.
Ready to register your DBA? Find your form here.
What comes next
Once you get everything you need filed with the counties you are going to be working in, you should start doing other things to build and protect your Delaware DBA under your registered trade name.
Open up a business checking account
Banks require a trade name certificate before approving the opening of a business bank account. Most require this for sole proprietors and partnerships wanting to use a DBA name. This should be one of the first things you should do for your new business to accept payments and pay for expenses.
Get an EIN
This is a federal employer identification number associated with your business that is issued by the Internal Revenue Service (IRS). An EIN is required in filing taxes, hiring employees, and dealing with vendors. Most require it on contracts or other financial forms. Lenders and investors like for businesses to have it too. Generally, sole proprietors aren’t required to have an EIN, but you will need one to file separate taxes, which is what you will do when you use a DBA. You will also need an EIN to hire anyone to work at your business.
Check state tax requirements
Delaware is simple with taxes as it doesn’t have any state or local taxes, but you may want to check for any specialty taxes, like a hospitality tax, to be sure there isn’t something you’re missing. Some businesses are required to have state employer tax numbers in Delaware, although most sole proprietorships are not required to have them. You can find out more about the various tax laws and regulations here.
Check with state insurance and hiring requirements
Delaware has laws regarding workers’ compensation, and businesses must abide by them or face fines and penalties. Delaware requires businesses with one or more employees to have workers’ compensation insurance. Find out more about the state’s rules here. It doesn’t require businesses to have liability insurance, but getting it is a good idea. Liability insurance will pay out claims in case you are sued over a bad product or customer injury. You should include liability insurance in your plan to have liability protection.
Set up your business goals and policies
A business plan provides for a solid business structure, even if you are running your business alone. It is a basis for decisions and can help get loans and investors. Having policies and standards written out is also a good foundation for consistent actions. This may include dealing with customers, long-range planning, and expansion.
Establish a marketing plan
Every business, including a new DBA, needs to start with a marketing plan to attract customers. Marketing plans should be one of the first things you create long before you plan to launch your business or promote the DBA with your business. Marketing plans should include a variety of exposure from the internet to radio, television, and local newspaper ads. It could also include booths at various events, direct mail, and opening week coupons. It helps establish your brand and keeps your DBA in front of the public.
Connect with resources for help
There are plenty of business resources in Delaware that will help you get started in your new DBA. Some can link you to government contracts, and others will help with business plans and funding. Some include the Division of Small Business, USA.gov, and the Delaware Small Business Development Center. Most cities and counties have a chamber of commerce that can help startups, and universities sometimes have incubator business programs you can check out.
If you plan to get an EIN, you can do so on the IRS website.
Who is a DBA best for?
Sole proprietorships and general partnerships often use DBA names so they can separate their personal name from the business name to protect personal assets. Keeping personal assets separate protects you in case of a lawsuit. It also protects you if the IRS audits you and in other legal situations.
Any type of legal business entity can do business under a DBA, although it is mostly sole proprietorships and general partnerships that find it most useful. Other businesses will use a DBA name to build a branded image, or because they have multiple niche businesses they wish to keep as separate legal entities. However, most states view each DBA as a separate business, so each will have to file its own tax forms, have its own state tax numbers, and fulfill other requirements.
The idea is to keep a DBA name separated from the legal name. The name of the business is one of the most important things you can do.
Why would entrepreneurs choose to set up a DBA in Delaware?
There are advantages to setting up a DBA in Delaware. Some of the more popular reasons people start businesses there include:
- Delaware has no state or local sales taxes, corporate income taxes, personal property taxes, inheritance taxes, or investment income taxes.
- It has some big industrial complexes for B2B.
- The state has a quality court system with a Court of Chancery to rule on business law disputes without using juries.
- It has a low cost of living.
- Delaware is geographically good for business with proximity to Pennsylvania, Maryland, Washington, D.C., and New York.
Cost to get a DBA set up
Even though the counties handle DBA filings, the state sets the cost, so it is the same everywhere to set up a DBA in Delaware.
- DBA filing is $25 per filing.
Local counties accept money orders and checks. Make checks out to the State of Delaware.
Who has to register a DBA in Delaware?
Any business that is using a fictitious or assumed name to conduct business in the State of Delaware must register its DBA with the local county that they are doing business in.
Will I still need a business license if I file my DBA name?
Yes, you will still need a business license for your legal business name in the city or county where your business is located.
How do I get a copy of my DBA filing?
Those who include a self-addressed stamped envelope and a copy of the completed and notarized form of the Registered of Trade, Business, and Fictitious Name Certificate can get a copy. You can mail your request to any of the three Superior Court prothonotaries located in Wilmington, Dover, and Georgetown.
Do I have to base my business in Delaware to get a DBA registration there?
No, Delaware doesn’t require you to base your business there to register a business in the state. However, there are some regulations that apply to out-of-state-based businesses.
Do I have to get multiple business licenses if I have multiple DBAs?
Yes, the state requires each business to have its own business license issued by the local municipality where you are doing business. Business licenses vary in price but cost an average of $75 each.
Do I have to register each DBA I have separately if they are under one legal business name?
Yes, you will need to register every DBA business you have with the State of Delaware, even if all are under one legal business name umbrella. You will get a DBA certificate for each business.
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