Complete Guide to Forming an LLC in Wilmington, Delaware - City & State Requirements

Overview: LLC Formation in Wilmington, Delaware

Forming a Limited Liability Company (LLC) in Wilmington, Delaware requires compliance with both state-level and city-level requirements. The Delaware Division of Corporations governs state LLC formation under Title 6, Chapter 18 of the Delaware Code, while the City of Wilmington imposes additional local business licensing requirements.

Bottom Line:

Wilmington LLCs must file a state Certificate of Formation ($90), obtain a Delaware business license ($75), secure a Wilmington city business license ($200-$5,000 depending on business type), and pay Delaware's annual LLC tax ($300). Wilmington also requires a head tax of $15 per month for each employee beyond five.

Step 1: Choose Your LLC Name

Delaware LLC Name Requirements

Delaware statute 6 Del. C. § 18-102 establishes mandatory naming conventions. Your LLC name must:

Include the words "Limited Liability Company" or the abbreviation "L.L.C." or the designation "LLC"
Distinguish itself from existing Delaware entities registered with the Secretary of State
Avoid restricted words without proper authorization (e.g., "Bank," "Insurance," "University")

Verify Name Availability

Check name availability using the Delaware Division of Corporations Entity Name Search. This free database searches all registered Delaware business entities.

Optional Name Reservation

Reserve your name for 120 days through the Delaware Division of Corporations for a $75 fee. Name reservation guarantees availability while you prepare formation documents but is not required.

Step 2: Appoint a Delaware Registered Agent

Registered Agent Requirement

Delaware law requires every LLC to maintain a registered agent with a physical Delaware street address. The registered agent receives service of process and official state correspondence on behalf of your LLC.

Registered Agent Must:

Maintain a physical street address in Delaware (P.O. boxes not permitted)
Be available during normal business hours
Be either an individual Delaware resident or a business entity authorized to conduct business in Delaware

Registered Agent Options

Option 1:

Act as your own registered agent if you maintain a physical Delaware address

Option 2:

Appoint an individual Delaware resident

Option 3:

Hire a professional registered agent service

Step 3: File the Certificate of Formation with Delaware

Certificate of Formation Requirements

Create your LLC by filing a Certificate of Formation with the Delaware Division of Corporations. According to 6 Del. C. § 18-201, the certificate must include:

Required Information:

LLC name (complying with naming requirements)
Registered agent name and Delaware street address
Signature of an authorized person forming the LLC

Filing Methods and Fees

Online Filing (Recommended):

Portal: Delaware One Stop
Fee: $90
Processing: Immediate to several business days
Confirmation: Emailed filed certificate

Mail Filing:

Delaware Division of Corporations
John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901

Contact Information:

Phone: (302) 739-3073
Website: https://corp.delaware.gov/

Expedited Service & Certified Copies

Contact the Division of Corporations for expedited processing options at additional cost.

Request a certified copy of your Certificate of Formation for $50. Banks and lenders typically require certified copies for opening business accounts.

Step 4: Obtain a Federal Employer Identification Number (EIN)

EIN Requirements for LLCs

The Internal Revenue Service requires most LLCs to obtain an Employer Identification Number. According to IRS guidelines on single-member LLCs, you need an EIN if your LLC:

Has employees
Files excise tax returns
Withholds taxes on non-wage income paid to non-residents
Has more than one member (multi-member LLCs are classified as partnerships)

Free Online Application (Recommended):

Apply through the IRS EIN Assistant for immediate issuance. Available Monday through Friday, 7:00 a.m. to 10:00 p.m. Eastern time.

Critical Requirement: Form your LLC with Delaware before applying for an EIN. The IRS requires legal entity formation before issuing an EIN.

Alternative Methods:

Fax: Send Form SS-4 to 855-641-6935 (4 business days)
Mail: Send Form SS-4 to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999 (4 weeks)

Important: The IRS never charges for an EIN. Beware of third-party websites that charge fees.

Step 5: Create an LLC Operating Agreement

Operating Agreement Requirement

Delaware mandates that LLCs adopt an operating agreement. Under 6 Del. C. § 18-101(9), the operating agreement governs the internal affairs and business conduct of your LLC. Delaware does not require filing the operating agreement with the state.

Operating Agreement Content

The operating agreement should establish:

Member ownership percentages and capital contributions
Profit and loss distribution methods
Management structure (member-managed or manager-managed)
Voting rights and procedures

Procedures for adding or removing members
Dissolution and liquidation procedures
Buy-sell provisions

Legal Framework

Delaware statute 6 Del. C. § 18-402 provides that unless the operating agreement specifies otherwise, management vests in members proportionally to their profit interests.

Step 6: Register for Delaware State Business License

State Business License Requirement

The Delaware Division of Revenue requires any person or entity conducting business in Delaware to obtain a state business license. This requirement applies whether your LLC operates within Delaware or conducts business from a Delaware entity outside the state.

Registration Process

Delaware Division of Revenue
Division of Unemployment Insurance (if you have employees)
Division of Workers' Compensation (if you have employees)

State Business License Fees

According to the Delaware Division of Revenue:

General Services License: $75 per year for first location
Additional Locations: $25 per location per year
License Expiration: December 31st annually
Three-Year Option: Available after first year (three times the annual fee)

Processing Time

Most businesses receive their Delaware business license within one month. Upon completing online registration through One Stop, you can print a temporary license immediately. Permanent licenses arrive by mail within 10 business days.

Contact Information:

Phone: (302) 577-8778
Email: [email protected]
Online Portal: https://tax.delaware.gov

Step 7: Obtain Wilmington City Business License

City Business License Requirement

Wilmington requires all businesses operating within city limits to obtain a City of Wilmington business license in addition to the state business license. This requirement applies whether your business location is inside Wilmington or if you conduct business or provide services within Wilmington.

Prerequisite: State License Required First

The City of Wilmington requires a valid State of Delaware business license as a prerequisite for obtaining a city business license. You must attach a copy of your current Delaware state business license to your city license application.

Wilmington Business License Application

Download the City of Wilmington Business License Application or contact the Wage/Business License Division.

Application Submission:

City of Wilmington
Department of Finance
Wage/Business License Division
800 N. French Street
Wilmington, DE 19801

Phone: (302) 576-2415

Website: https://www.wilmingtonde.gov/business

Wilmington Business License Fees by Category

License fees vary based on business type:

Professional Services: $300

Accountants, Architects, Attorneys, Consultants, Dentists, Physicians, Engineers, Veterinarians, and similar professions

Non-Professional Services: $200

Advertising Agencies, Barber Shops, Beauty Parlors, Cleaning Services, Computer Services, Day Care Centers, Employment Agencies, Janitorial Companies, and similar businesses

Construction Contractors: $200-$1,000

General Contractors, Subcontractors, Electricians ($200-$274). Tested Licenses: $1,000 (Air Conditioning, Boiler, Heating, Plumbing, Mechanical, Refrigeration)

Financial/Real Estate: $300-$1,200

Real Estate Agencies ($400), Banks/Trust Companies ($1,200), Investment Brokerage ($1,200), Finance Companies ($300)

Retail & Restaurants

Retail Businesses: $250
Restaurants: $300 (requires Health Certificate)

High-Fee Categories

Hotels/Motels: $3,000
Gas/Electric Utilities: $5,000
Telephone (Local): $3,000

Special Licensing Requirements

Tested Contractor Licenses:

Air Conditioning, Boiler Installation, Heating, Plumbing, and Mechanical Refrigeration Contractors must pass trade tests administered by the Chief Plumbing Inspector in the Department of Licenses and Inspections before obtaining a city business license.

Food Service Businesses:

Restaurants and edible product retailers must provide a copy of the Board of Health Certificate with their application.

Specialized Dealers:

Pawnbrokers, Secondhand Dealers, Scrap Metal Processors require Delaware State Police licensing. Attach certificate to city application.

Step 8: Wilmington Head Tax

Head Tax Requirement

Wilmington requires business owners to pay a head tax of $15.00 per month for every employee in excess of five employed by the LLC within the city carrying out the business.

Head Tax Calculation:

Employees 1-5: No head tax
Employee 6 and beyond: $15.00 per month per employee

Example:

An LLC with 10 employees in Wilmington pays head tax on 5 employees = 5 × $15 × 12 months = $900 per year

Head Tax Abatement

Head tax abatement is available for employers who employ more than 50 full-time employees (including the business owner) and commit to staying within Wilmington city limits for five years.

Step 9: Delaware Annual LLC Tax

Annual Tax Payment

Delaware requires all LLCs to pay an annual tax of $300 to the Delaware Division of Corporations. This flat-rate tax applies regardless of LLC income, revenue, or activity level.

Annual Tax Details:

Amount: $300 (flat rate)
Due Date: June 1st of each year
First Payment: Due June 1st following the calendar year your Certificate of Formation becomes effective
Payment Portal: Pay online through the Division of Corporations

Consequences of Non-Payment

LLCs that fail to pay the annual tax by June 1st lose good standing status. The Delaware Secretary of State will not accept any certificates for filing until the LLC pays all outstanding annual taxes.

No Annual Report Required

Delaware LLCs do not file annual reports. The only annual requirement is the $300 tax payment.

Step 10: Delaware Gross Receipts Tax Registration

Gross Receipts Tax Overview

Delaware imposes a gross receipts tax on businesses selling goods or providing services. The Delaware Division of Revenue administers this tax as an alternative to traditional sales tax.

Tax Details:

Tax Rates: Between 0.1037% and 2.0736% depending on business classification and industry
Monthly Exemption: The first $80,000 in gross receipts each month is exempt from taxation

Registration Process

Register for gross receipts tax through Delaware One Stop when obtaining your Delaware business license. File and pay gross receipts tax through the Delaware Taxpayer Portal.

Cost Summary: Forming an LLC in Wilmington

Initial Formation Costs

Delaware State Fees:

Certificate of Formation: $90
State Business License: $75
State Subtotal: $165

Wilmington City Fees:

City Business License: $200-$5,000
(Most common: $200-$300)

Federal:

EIN Application: $0 (free)

Total Minimum Initial Cost: $365-$5,165

Annual Ongoing Costs

Delaware Annual LLC Tax: $300
State Business License Renewal: $75
City Business License Renewal: $200-$5,000
Head Tax: $180/year per employee beyond five
Gross Receipts Tax: Variable (0.1037%-2.0736%)

Minimum Annual Cost: $575

(assuming no employees beyond five and basic business license)

Contact Information Directory

Delaware Division of Corporations

John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901

Phone: (302) 739-3073

Website: https://corp.delaware.gov/

Online Services: https://onestop.delaware.gov/

Delaware Division of Revenue

Wilmington Office:

Carvel State Office Building
820 North French Street
Wilmington, DE 19801

Phone: (302) 577-8205

Business License Questions: (302) 577-8778

Email: [email protected]

Website: https://revenue.delaware.gov/

City of Wilmington

Wage/Business License Division:

Department of Finance
800 N. French Street
Wilmington, DE 19801

Phone: (302) 576-2415

Department of Land Use and Planning:

Louis L. Redding City/County Building
800 N. French Street, 3rd Floor
Wilmington, DE 19801

Office Hours: Monday-Friday, 8:30 a.m. to 4:30 p.m.

City Website: https://www.wilmingtonde.gov/business

Internal Revenue Service

EIN Application: IRS EIN Assistant

Phone (International): (267) 941-1099

Wilmington LLC Formation Checklist

Formation Steps:

☐ Choose and verify LLC name availability
☐ Appoint Delaware registered agent with physical Delaware address
☐ File Certificate of Formation with Delaware Division of Corporations ($90)
☐ Obtain federal EIN from IRS (free online application)
☐ Draft and adopt LLC operating agreement
☐ Register for Delaware state business license through One Stop ($75)

Wilmington-Specific Requirements:

☐ Obtain Wilmington city business license ($200-$5,000)
☐ Register for Delaware gross receipts tax
☐ Understand Wilmington head tax obligations ($15/month per employee beyond five)
☐ Obtain any required professional or occupational licenses
☐ Set calendar reminders for annual requirements

Annual Reminder Dates:

June 1: Delaware annual LLC tax ($300)
December 31: State and city business license renewals

Additional Resources

Delaware Official Resources:

Wilmington & Federal Resources:

This guide uses only official government sources and reflects Delaware and Wilmington requirements as of 2025. Contact the Delaware Division of Corporations, Delaware Division of Revenue, and City of Wilmington directly for the most current information. All fees and requirements are subject to change.