Delaware has an annual report that is combined with the franchise tax. While a Delaware LLC (limited liability company), limited partnership and general partnerships do not file an annual report, they must file an annual flat-rate tax. Three months before the March 1st due date, the Delaware Division of Corporations delivers a notice. All corporations incorporated in Delaware must file this Annual Report and pay a franchise tax.
Here is what you need to know.
Due Date and Penalties
Annual Reports for Delaware corporations are due on March 1st of every year. If the report is late, the corporation will pay a penalty of $100 along with the annual report fee, tax and interest of 1.5% per month applied to any unpaid balance. If your corporation has not met this filing requirement, Delaware will not issue a Good Standing Certificate!
This Annual Report must be filed online according to Delaware state law. If you like, you may choose a corporate services company to file on your behalf or walk you through the process.
Dissolution and Merger
It is very important to remember that the annual report must be filed before any merger or dissolution filings. An annual report will be due for any entity that exists at any time of the year, even for a single day. For an entity to dissolve or merge, it must pay the prior year's tax and have filed the prior year's annual report and pay the current year's tax.
Franchise Tax and Annual Report Fees
While exempt domestic Delaware corporations do not pay a tax, the annual report filing fee for other domestic corporations is $50 plus taxes. The minimum tax has been raised to $175 effective July 1, 2014 for corporations using the Authorized Shares method, or a minimum of $350 for corporations using the Assumed Par Value Capital Method. With either method, the maximum tax is $180,000.
Corporations that owe at least $5,000 may pay estimated taxes in quarterly installments with 40% due on June 1, 20% due by September 1, another 20% due by December 1st and the final 20% due by March 1.
Calculating Franchise Taxes in Delaware
If your corporation has no par value stock, the Authorized Share Method will be less and works as follows:
5,000 shares or less: $175
5,001 - 10,000 shares: $250
Each additional 10,000 shares or a portion: add $75
Maximum annual tax is $180,000
To calculate taxes using the Assumed Par Value Capital Method, you must have the number of all issued shares and the total gross assets, which are included on your Annual Franchise Tax Report. Total gross assets are the total assets reported on Form 1120, Schedule L. Using this method, the tax rate is $350 per million or a portion of a million. If the assumed par value capital is under one million dollars, the tax is determined by dividing the assumed par value capital by $1 million and then multiplying by $350.
Learn more about incorporating and ongoing requirements in Delaware by clicking here.
Here is what you need to know.
Due Date and Penalties
Annual Reports for Delaware corporations are due on March 1st of every year. If the report is late, the corporation will pay a penalty of $100 along with the annual report fee, tax and interest of 1.5% per month applied to any unpaid balance. If your corporation has not met this filing requirement, Delaware will not issue a Good Standing Certificate!
This Annual Report must be filed online according to Delaware state law. If you like, you may choose a corporate services company to file on your behalf or walk you through the process.
Dissolution and Merger
It is very important to remember that the annual report must be filed before any merger or dissolution filings. An annual report will be due for any entity that exists at any time of the year, even for a single day. For an entity to dissolve or merge, it must pay the prior year's tax and have filed the prior year's annual report and pay the current year's tax.
Franchise Tax and Annual Report Fees
While exempt domestic Delaware corporations do not pay a tax, the annual report filing fee for other domestic corporations is $50 plus taxes. The minimum tax has been raised to $175 effective July 1, 2014 for corporations using the Authorized Shares method, or a minimum of $350 for corporations using the Assumed Par Value Capital Method. With either method, the maximum tax is $180,000.
Corporations that owe at least $5,000 may pay estimated taxes in quarterly installments with 40% due on June 1, 20% due by September 1, another 20% due by December 1st and the final 20% due by March 1.
Calculating Franchise Taxes in Delaware
If your corporation has no par value stock, the Authorized Share Method will be less and works as follows:
5,000 shares or less: $175
5,001 - 10,000 shares: $250
Each additional 10,000 shares or a portion: add $75
Maximum annual tax is $180,000
To calculate taxes using the Assumed Par Value Capital Method, you must have the number of all issued shares and the total gross assets, which are included on your Annual Franchise Tax Report. Total gross assets are the total assets reported on Form 1120, Schedule L. Using this method, the tax rate is $350 per million or a portion of a million. If the assumed par value capital is under one million dollars, the tax is determined by dividing the assumed par value capital by $1 million and then multiplying by $350.
Learn more about incorporating and ongoing requirements in Delaware by clicking here.