How to File the Delaware Annual Report and Franchise Tax
You can file your Delaware Annual Report and Franchise Tax yourself. We’ll tell you exactly how to prepare it, and we’ll walk you through the filing process in this step-by-step guide.
Delaware Annual Report and Franchise Tax Overview
LLCs: This is real easy for LLCs. There is no annual report requirement, and the Annual Franchise Tax is a flat $300.
Corporations: This is real easy for most corporations. If your corporation has issued less than 5,000 shares of stock (including 0) than you’ll pay a flat $175 fee. This is most corporations. If you have more than 5,000 shares of stock issued it gets a little more complicated. There are two methods of calculating your tax if you have more than 5,000 shares of stock issued: The Authorized Shares Method and the Assumed Par Value Capital Method. You’ll want to contact an accountant to help you sort this out. The maximum tax due in this situation can be $200,000.
Benefits of Hiring a Service
The step-by-step guide below will make it simple for you to file your annual report on your own. We promise.
But, business owners often hire out annual report filing because of the out-sized consequences of forgetting to do it themselves. A good commercial registered agent, like Northwest Registered Agent, includes annual report compliance reminders as part of their service. We’ve used lots of online services for this, but in our experience Northwest is the most transparent and helpful.
Step-by-Step Guide to Filing Your Delaware Annual Report and Franchise Tax Online
Step 1: You’ll need your Entity File number, which you can find using the Delaware Business Name Search. Enter your business name in the search field, then select your business from the list. This will give you the number you need.
Step 2: Once you have your filing number, enter it in the Delaware Annual Report Filing System. Continue to the payment screen, which will give you your balance due, including any late fees. From here, just make your payment and you’re done til next year!
Deadlines and Filing Fees
Corporations: May 1st
LLCs: June 1st
Consequences of Filing Late
If you don’t file your annual report on time, you’ll face a $200 late fee. Late filing may also put your business at risk of administrative dissolution, which means the state could dissolve your business entity.
Required Info for Your Delaware Annual Report
LLCs must only pay the required $300 fee. No reporting is required.
Corporations will need to provide the following:
- Business Name and Address.
- Registered Agent Name and Address.
- Business Structure (Corporation, LLC, or LLP).
- Names and Addresses of Directors, Officers, and/or Managers.
Maintaining Compliance and Good Standing
By filing your annual report on time, you will maintain compliance with state regulations and ensure that your business entity remains in good standing with the state of Delaware.
DE Annual Report and Franchise Tax Frequently Asked Questions
A Delaware Annual Report is a filing requirement for all corporations registered in Delaware. It is a document that provides updates to the Delaware Secretary of State about the company’s current officers, directors, and other relevant details such as the company’s business address, registered agent, and authorized shares. The Annual Report must be filed online through the Delaware Division of Corporations website, and there is a fee for filing.
The Delaware franchise tax is calculated based on the company’s authorized shares or the number of issued shares, whichever is greater. There are two methods of calculating the tax: the Authorized Shares method and the Assumed Par Value Capital Method. The Authorized Shares method calculates the tax based on the number of authorized shares, while the Assumed Par Value Capital Method calculates the tax based on the assumed par value of the company’s total authorized shares. The deadline for paying the franchise tax is March 1st each year.
If a company fails to file its annual report or pay its franchise tax in Delaware, the Delaware Secretary of State will send a notice of default to the company’s registered agent. The company will have a limited amount of time to file the report and pay the tax, or it will be placed in a status of “void” or “forfeited,” which can result in the loss of the company’s good standing with the state. Additionally, the company may be subject to penalties and interest for the late filing and payment of the annual report and franchise tax.