Delaware compliance for mobile app startups

Research steps and summary Steps taken: - Performed targeted web searches (government sites, legal/accounting resources, and reputable privacy/compliance blogs) for Delaware-specific requirements relevant to mobile app startups: entity formation and maintenance, taxes and fees, registration/agent requirements, state privacy and data breach laws, federal app-related regulations, BOI/Beneficial Ownership (CTA/FinCEN), business licensing, and employment/payroll obligations. - Prioritized official Delaware sources (Division of Corporations, One Stop Business Registration), recent state privacy law coverage, and practical startup guides (Stripe, Shopify) to assemble actionable compliance guidance. Key findings (state-specific, practical guidance for mobile app startups incorporated or operating in Delaware): 1) Entity formation & maintenance - Delaware is a common choice for startups (LLC or corporation). Every entity must maintain a Delaware-licensed registered agent with a physical Delaware address. (Delaware Division of Corporations) - Filing fees: LLC formation filing fee typically $90; corporations have variable initial filing fees depending on shares/par value. (Division of Corporations guidance) 2) Annual filings & taxes - Corporations: must file an Annual Report and pay franchise tax (annual report fee and a franchise tax; the annual report is due March 1). Minimum franchise tax and report fee apply. Delaware corporations have a minimum franchise tax and an annual report fee. (Division of Corporations, Stripe summary) - LLCs: Delaware LLCs pay an annual franchise tax (commonly quoted as $300) but typically do not file an annual report. (Division of Corporations / startup guides) 3) Registered agent and multi-state operations - If you incorporate in Delaware but operate elsewhere, you’ll likely need to register (foreign qualify) in the other state(s) where you have employees or a physical presence—incurring additional fees and compliance obligations (state-level taxes, filings). Maintain a registered agent in Delaware. (Division of Corporations, Stripe) 4) State business license & local permits - A statewide Delaware business license is required; apply via Delaware’s One Stop Business Registration portal (One Stop). Additional local licenses or permits may be required depending on operations or locality (e.g., if you hire in-state staff or have local office). (One Stop guidance, Shopify) 5) Beneficial ownership (BOI/Corporate Transparency Act) - Entities formed in or registered to do business in Delaware must comply with the federal Corporate Transparency Act (FinCEN reporting) where applicable; plan to collect and report beneficial ownership information as required. (Delaware Division of Corporations guidance referencing CTA) 6) Privacy, data protection, and app-specific laws - Delaware Personal Data Privacy Act (DPDPA) was signed Sept 11, 2023 and took effect Jan 1, 2025. Applicability thresholds reported include processing personal data of at least 35,000 Delaware consumers annually OR processing 10,000+ Delaware consumers and >20% revenue from sale of personal data; DPDPA adds consumer data rights and opt-out requirements. Mobile app startups should assess applicability, implement data inventories, DSR processes, consent/CM systems, and data security measures. (Delaware privacy law coverage) - Federal laws relevant to mobile apps: COPPA (children’s data), HIPAA (if handling PHI with covered entities), FTC enforcement around unfair/deceptive privacy/security practices, TCPA/CAN-SPAM for communications — ensure privacy policy, terms, consent flows, and data handling practices align with these rules. 7) Data breach notification - Delaware has state data breach notification laws; mobile apps must follow Delaware’s breach notification timing and content rules if personal data of Delaware residents is affected. (Delaware Code / state guidance) 8) Sales tax & digital goods - Delaware has no statewide sales tax, which may simplify selling digital goods from a Delaware entity; however, sellers must consider sales tax nexus where customers reside—collect/ remit other states’ taxes as required. (State tax guidance & startup summaries) 9) Employment, payroll & workers’ comp - If hiring in Delaware, register for withholding, unemployment insurance, and workers’ compensation per Delaware Department of Labor and Division of Revenue rules. If all employees are out-of-state, register and comply where employees work. (Delaware DOL and Division of Revenue guidance) Practical next steps for a mobile app startup (action checklist): - Decide entity type (LLC vs C-corp) based on fundraising/exit expectations; consult counsel for Delaware corporate governance matters. - File formation documents with Delaware Division of Corporations and appoint a registered agent. - Register for Delaware business license (One Stop) if operating in-state; if operating elsewhere, foreign qualify in those states. - Budget for ongoing costs: Delaware LLC annual tax (~$300) or Delaware corporation franchise tax + annual report fee; registered agent fees; state business license fee; foreign registration fees. - Evaluate privacy compliance (DPDPA applicability), implement data inventory, consent and DSR processes, update privacy policy, and assess COPPA/HIPAA/FTC exposure. - Prepare for BOI/FinCEN reporting if applicable and collect beneficial owner data at formation. - If hiring, register for withholding and unemployment insurance and secure workers’ compensation coverage per Delaware requirements. - Consult an experienced Delaware corporate attorney and CPA to confirm tax calculations (especially franchise tax), entity governance documents (bylaws/operating agreement), and investor-focused terms.