Delaware is the 6th least populous state and the second smallest after Rhode Island. The Blue Hen state has quite an interesting economy. Its lax corporate laws have made it an onshore corporate tax haven.
50% of all business entities listed in the NYSE (New York Stock Exchange) and 60% of all Fortune 500 companies have made a home in Delaware.
As for small businesses (SMBs), they make up a very large majority of the state’s businesses and contribute immensely to Delaware’s $4.4 billion worth of exports.
Below is a list of interesting facts about SMBs in the state of Delaware:
- The state has 84,675 small businesses, that’s 98.4% of all businesses.
- Small firms write the checks for approximately 187,221 workers or 46.7% of the state’s workforce.
- A total of 11,944 minorities are self-employed in Delaware, a paltry 1.2% of the general population.
- By the end of 2019, small businesses had created 4,776 new jobs. Of these, 2,909 were in businesses with less than 20 employees.
- Self-employed individuals have an average median income of $50,000.
- 42,9% of all employees in the private sector are working in the health and social assistance industry, a total of 29,431.
- SMBs in the mining, quarrying, oil and gas extraction sector employ only 81 people.
- There are 12,032 small enterprises in the professional, scientific, and technical services industries. 9,405 of these are non-employer firms while 2,334 have 1-20 employees.
- There are 1,909 small firms in the export business sector. They contribute 23.4% of Delaware’s $4.4 billion in total exports.
- The real estate, rental and leasing industry is the 2nd largest with 10,931 small businesses.
- Delaware state law requires that every new Delaware LLC designates a Delaware registered agent that will be available during regular business hours at a physical address within the state.
- The number of small businesses has been rising steadily in the state. The number of SMBs went from 77,306 in 2017 to 84,675 in 2019. This represents a 6.13% rise.
- Before registering a business, you have to reserve the business name online for 120 days at a fee of $75.
- Sole-proprietors do not have to register their businesses with the state. However, they do need to file their business name at their local county clerk office.
- To form an LLC (Limited Liability Company), you need to file your documents of incorporation at the Delaware Division of Corporations. You must, however, mail or fax these documents as the state does not allow online filing.
- Delaware LLCs, limited partnerships and general partnerships are required by law to pay an annual tax of $300.
- For the S-corporations, the tax is paid through individual shareholders. This means each shareholder pays their own portion of tax to the state.
- Delaware has a special court called the Court of Chancery which allows the state to adjudicate corporate litigation. Most of its rulings often influence Supreme Court decisions. This gives businesses incorporated in Delaware a more favorable system of reviewing legal matters if any tax laws need to be reviewed.