How to Start a Contracting Business in Delaware

Going from working under someone else's license to running your own contracting business in Delaware means navigating registrations across multiple agencies. The state doesn't issue a single "general contractor license" — instead, you'll build a compliance stack that runs from entity formation through local permitting.

Step 1: Form Your Business Entity

Most Delaware contractors start with either a sole proprietorship or a single-member LLC. An LLC provides personal liability protection — if a project dispute or injury claim hits your business, your personal assets stay separated.

Register your LLC with the Delaware Division of Corporations. The state filing fee is $110 for an LLC. If you plan to operate under a trade name different from your legal business name, register that through the Delaware One Stop portal for $25 per name. As of February 2, 2026, trade name registration moved from the Superior Court to the Division of Revenue, and notarization is no longer required.

Once your entity exists, obtain a Federal Employer Identification Number (EIN) from the IRS. An EIN is required for all business types except sole proprietors with no employees; even when it is not required, it keeps your Social Security number off business documents.

Step 2: State Business License

Register for a State Business License through the Combined Registration Application on Delaware One Stop (onestop.delaware.gov). The annual fee is $75 for your first location, plus $25 for each additional physical location. First-year licenses are prorated based on the month you register. Contractors over 65 qualify for a 75% discount.

During registration, select the correct NAICS code for your construction specialty. The NAICS code determines which Gross Receipts Tax rate applies to your business. For general construction, the rate is 0.6472% of gross receipts, with a $100,000 monthly exclusion.

You'll register as either a Resident Contractor (if your business has a permanent physical office in Delaware) or a Non-Resident Contractor (if you're based out of state). Non-residents must post a surety bond equal to 6% of any single contract valued at $20,000 or more, or of combined contracts within a calendar year totaling $20,000 or more.

Step 3: Department of Labor Registration

Before performing any construction work, register under the Delaware Contractor Registration Act with the Department of Labor. This is separate from your business license and focuses on labor compliance — preventing worker misclassification and ensuring proper insurance coverage.

Registration fees depend on your work scope:

• Private work only: $200/year
• Public work only: $300/year
• Both: $500/year

You'll need to provide proof of workers' compensation insurance (or a waiver if you have no employees), an active State Unemployment Insurance (SUI) account, and an OSHA-compliant written safety plan. The SUI taxable wage base for 2026 is $14,500 per employee.

Step 4: Home Improvement Registration (If Residential)

If you're doing residential remodeling, repairs, or additions, register as a Home Improvement Contractor with the Attorney General's office under the Home Improvement Consumer Protection Act. This requires a $10,000 surety bond and subjects you to specific contract rules — including a one-third cap on advance deposits and mandatory three-day cancellation notices.

Step 5: Local Licensing

State credentials don't grant the right to pull building permits. You'll need local permits and, where required, local contractor licenses in the county or municipality where you work:

• New Castle County: Permit Endorsed license ($400/year) plus a statutory compliance bond ($25,000 to $200,000 depending on your class).
• Wilmington: City business license ($200/year per trade classification).
• Newark: City license ($100/year) plus a compliance bond scaled to construction cost.
• Dover: City license based on 0.046% of gross receipts ($125 minimum).
• Kent County and Sussex County: Building permits through their respective planning departments.

Step 6: Open Payroll and Tax Accounts

If you'll have employees, set up withholding and unemployment insurance accounts. For Delaware Paid Leave, businesses with 9 or fewer employees are exempt, businesses with 10–24 employees must offer parental leave at a 0.32% premium, and businesses with 25 or more employees have full coverage at 0.8%. Businesses with 10 or more employees register on the LaborFirst portal, and employers may withhold up to 50% of the premium from employees.

File your Gross Receipts Tax returns monthly or quarterly depending on your filing volume — and file even in months where your receipts fall below the $100,000 exclusion. Missing a zero-liability return triggers penalties and delays your license renewal.

The Delaware General Contractor License Guide provides the complete compliance sequence with every form, fee, portal link, and deadline mapped out — from LLC formation through your first building permit.

See more Delaware guides →