Harvard Business Services, Inc

A non-stock, nonprofit company will not pay the standard yearly fees but must still file and submit reports on their activity each year with no other requirements put upon them by law. A corporation with 5,001 authorized shares or more is considered a maximum stock corporation. The annual report fee is $50 and the tax would be somewhere between $200 and $200,000 per year, as illustrated below. The Delaware Franchise Tax for a corporation is based on your corporation type and the number of authorized shares your company has.

What information must a Delaware annual report contain?

The amount of the tax is based on the gross receipts of the business, which means that it goes up as a business makes more money. The tax is typically paid annually, but businesses can choose to pay it quarterly or monthly if they prefer. Non-profit organizations are exempt from the tax, but they still have to file a return with the state showing their gross receipts. The franchise tax for an LLC or LP in Delaware is a flat annual rate of $300.

Do I Need to Submit Anything Else With My Delaware Franchise Tax Payment?

Delaware LLCs do not have to complete the annual report, but still pay the $300 Delaware LLC Franchise Tax fee. The State of Delaware allows you to pay the lower of the two Delaware Franchise Tax calculation methods. Therefore, if you receive a tax bill for tens of thousands of dollars, it may be in your best interest to try calculating your Delaware Franchise Tax with the assumed par value capital method. A registered agent receives legal documents and official government communications on behalf of a corporation or LLC.

It provides basic information about the company, such as where it’s located, who the registered agent is, the names of its directors, and its financial status. States that require annual reports use these documents as a way to take a pulse on how the business is doing and ensure that it’s in compliance with state regulations. If the Delaware Franchise Tax calculation uses the assumed par value capital method, the gross assets and issued shares are also to be listed. If you decide to pay your Delaware Franchise Tax for a corporation with us over the phone, the annual report would need to be separately submitted to us by email, fax or mail.

How to file a Delaware annual report with LegalZoom

If you have already paid this tax, you may be wondering if you can get a refund. The answer what is an indirect cost definition depends on the reason why you are no longer doing business in Delaware. In addition, businesses that have less than $50,000 in gross receipts are also exempt from the tax. If your business falls into one of these categories, you will not have to pay the Delaware Franchise Tax. Every corporation that is incorporated in Delaware or does business in Delaware has to pay the Delaware Franchise Tax.

What is an annual report?

1. In this blog post, we will discuss what the Delaware franchise tax is, how to pay it, and some of the exemptions that may apply to your business.
2. If a corporation has more than 1,500 shares, it has to pay $175 for every 1,000 shares.
3. A corporation with 5,000 authorized shares or less is considered a minimum stock corporation.
4. It provides basic information about the company, such as where it’s located, who the registered agent is, the names of its directors, and its financial status.

For a discounted rate you can submit your Delaware Franchise Tax payment via our online Franchise Tax form. Failing to pay your franchise tax by March 1st for corporations or June 1st for LLCs will result in a late penalty and interest. After missing the deadline, you'll need to pay a $200 late fee with cumulative interest each month. Delaware law requires all corporations registered in the state to have a board of directors (consisting of at least one person), and the business’ articles of incorporation must state how many directors sit on the board. You can reduce your Delaware franchise costs in certain circumstances if you use the Assumed Par Value method.

The amount of tax that a corporation has to pay depends on the number of shares that the corporation has. If a corporation has more than 1,500 shares, it has to pay $175 for every 1,000 shares. If a corporation has less than 1,500 shares, it has to pay $350 for every 1,000 shares. Corporations, LLCs and LPs are taxed in arrears, meaning the tax due by each due date is for the previous calendar year. The franchise tax is due even if the business didn’t conduct any activity or lost money. If your company is no longer operating, it’s important to close your Delaware business and end these fees.