Frequently Asked Questions About Delaware Corporation Annual Reports and Franchise Tax Payments

As reported on the Delaware Secretary of State website, more than 900,000 entities have legal homes in Delaware, including more than 50% of all listed companies in the US and 63% of Fortune 500 . The corporate services package, including modern and flexible company law, includes respected courts, business-friendly state governments, and customer service-oriented staff in the Delaware corporate sector.

In December, Delaware entity registration agents will begin sending Delaware company annual reports and franchise tax due date notices. This post provides an overview of when the deadline is due to maintain the good standing and presence of the Delaware business entity. Information provided is limited to Delaware companies and non-profit corporations only, information on Delaware foreign corporations and other entity types such as limited liability companies or partnerships that must be submitted by June 1 Is not included.

Q: When is the deadline?

A: Delaware domestic companies are required to submit a fully completed annual report and pay the annual report submission fee and its franchise tax by 1 March. Franchise tax payments are for the previous calendar year. Exempted companies do not need to pay franchise tax, but must submit a completed report and pay an annual report submission fee. The report must be submitted online and submitted to the corporate department by 1 March.

Q: How is the amount of Delaware franchise tax calculated?

A: There are two ways to calculate the franchise tax for a Delaware corporation. Authorized stock law and nominal face value capital law. Companies pay the lesser of the two amounts.

Q: How can I calculate franchise tax using the Authorized Share method?

A: For companies with 5,000 shares or less, pay a minimum tax of $ 75. For companies with 5,001-10,000 shares, the tax is $ 150. For companies with over 10,000 shares, the tax is $ 150 and $ 75 for every 10,000 shares. Or part of it. The maximum annual tax is $ 180,000. For additional information on calculating tax payments, please visit http://www.state.de.us/corp/frtaxcalc.shtml.

Q: How can I calculate franchise tax using the notional value method?

A: For companies using the notional value method, the minimum tax amount is $ 350. To use this method, a company would use this method for the total number of issued shares [including treasury stock] and total assets [US Form 1120, Schedule L, the company's fiscal year ending the calendar year of the report] , $ 350 per $ 1,000,000, or a portion of the estimated face value capital, with a maximum annual tax of $ 180,000. Please visit or visit the Delaware website above for additional information.

Q: Are there any additional fees I need to pay when submitting a company's Delaware Annual Report?

A: The Delaware Secretary of State charges an additional annual report submission fee of $ 75.

Q: How is the franchise tax for non-exempt non-stock corporations calculated?

A: All non-exempt non-corps pay a franchise tax of $ 75. There is no alternative tax law.

Q: I understand that some companies have to pay franchise taxes quarterly. How does it work?

A: Taxpayers with $ 5,000 or more are 40% by June 1, 20% by September 1, 20% by December 1, and the rest of the quarter by March 1. Pay the estimated tax in installments.

Q: Do I need to submit an annual report with taxes paid quarterly?

A: No, Delaware's annual report only needs to be submitted once a year by 1 March.

Q: Can I wire transfer to the Delaware Secretary of State if the tax is high?

A: Companies can pay franchise taxes directly via DE SOS ACH-. This method should be used for all transactions over $ 5,000 . If you wish to pay by wire transfer, check with your registered agent. Most professional registered agency companies receive funds via wire transfer, pay to the Delaware Secretary of State, and track evidence of such payments on behalf of the company.

Q: What happens if I miss the March 1 deadline?

A: For reports not filed by March 1, Delaware Division imposes a $ 125 fine in addition to taxes and annual reporting fees, plus a 1.5% monthly interest applicable to unpaid tax revenues. The

It is also important to note Delaware do not do Issue a certificate of excellence for companies that do not meet the annual report submission requirements . After two years of non-submission and non-payment, the company establishment certificate will be revoked.

Q: What information is required for the annual report?

A: The corporate Delaware Annual Report is pre-populated with specific information including the entity's exact legal name, the total number of authorized shares, the class and face value of the shares, and the breakdown of franchise taxes and fees. The In addition, the annual report should include the address, name, address, and telephone number of the following major offices: all Director, name, address, phone number 1 Officers and authorized signers.

Q: Who can act as an authorized signer of an electronic annual report?

A: Company officers or directors can sign annual reports. If the company does not elect an officer or director at the time of submitting the annual report, the founder must sign it.

Q: How can I submit my company's annual report and make payments?

A: Delaware currently requires that all annual franchise tax reports be filed electronically, received in US dollars only, and withdrawn to a US bank.

To submit a report and pay taxes and fees, you have the following options:

1. File electronically at the Delaware website above. Payment options at state sites are ACH Debit, Visa, MasterCard, Discover, or American Express. Live support is available online from 8:30 am to 4 pm Monday through Friday. Contact Us "Link. If you need special accommodation, please contact the corporate division franchise tax department at [302] 739-3073.


2. File electronically using a registered agent's online system to submit an annual Delaware report. Agents that provide such a system typically store the information needed to complete the report, so you do not have to re-enter the report in the next few years. [If submitting directly to the state, all information must be entered each year.] Payment options at the registered agency sites are different, so check in advance to make sure you can pay with the options provided.

Q: What happens if a legal entity is merged or dissolved by the end of the calendar year?

A: Delaware requires annual reports to be up-to-date First All dissolution and merger applications. Upon dissolution or merger, all franchise taxes must be paid by the date of filing the dissolution or merger certificate with the Delaware Secretary of State.

If time-sensitive filings are delayed for this reason, frustration can occur if this requirement is not recognized. In these cases, it is advisable to identify the tax amount well before the date of application for dissolution or merger. A professional registered agency company should be able to help you get all the taxes you pay on a certain date.