Delaware LLC Annual Franchise Tax Step-by-step LLCU®

The Delaware Franchise Tax and the Registered Agent Fee are two separate, unrelated fees. The annual Franchise Tax is imposed by the State of Delaware and varies with the size of your business. The annual Registered Agent Fee is a fixed amount paid to Harvard Business Services, Inc. to act as an agent for your entity in the state. the hidden costs of cause marketing Corporations must complete an annual report along with their Delaware Franchise Tax payment. Our annual Registered Agent Fee is $50 per year, and is due on the anniversary month of the formation of your company. Corporations, LLCs and LPs are taxed in arrears, meaning the tax due by each due date is for the previous calendar year.

  • Corporations, LLCs and LPs are taxed in arrears, meaning the tax due by each due date is for the previous calendar year.
  • This is not the same as your Delaware annual report and will not mention internal company information, such as director or officer details.
  • The Franchise Tax for a Delaware LLC or a Delaware LP is a flat annual rate of $300.
  • Reminders The state will send reminder notifications by mail to your LLC’s Registered Agent.

The limited partnership (LP) Franchise Tax is also due by June 1 of every year. If the tax is not paid on or before June 1, the state imposes a $200 late penalty, plus a monthly interest fee of 1.5%. Franchise Tax is the fee imposed by the State of Delaware for the right or privilege to own a Delaware company.

Method of Filing Your Annual Franchise Tax can only be paid online and cannot be filed by mail. Yes, regardless of your Delaware company activity or not conducting business, you are still required to pay the Delaware Franchise Tax to remain in Good Standing. If your company is no longer active and you wish to close your business, be sure to follow the proper steps to Dissolve a Corporation, or Cancel an LLC.

Delaware Franchise Tax FAQ

The total cost of the corporation’s Delaware Franchise Tax consists of an annual report fee and the actual tax due. 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. Owners of multiple corporations will need to pay Delaware Franchise Tax for each entity separately as each entity is required to file an annual report. A non-stock/non-profit company is considered exempt by the State of Delaware. This type of company does not pay the standard annual Delaware Franchise Tax, but must still file and pay the annual report fee of $25 per year.

As your Registered Agent, we will send you tax reminders both by mail and email, well in advance of the due date. We offer a tax filing service for a small fee in addition to your Franchise Tax amount. For a discounted rate you can submit your Delaware Franchise Tax payment via our online Franchise Tax form. Recommendation We recommend paying your Franchise Tax early (you can begin paying in February) to avoid any late fees. Many people pay this tax in April, since they’ll be paying other taxes as well at that time.

  • If your company is no longer active and you wish to close your business, be sure to follow the proper steps to Dissolve a Corporation, or Cancel an LLC.
  • The annual Registered Agent Fee is a fixed amount paid to Harvard Business Services, Inc. to act as an agent for your entity in the state.
  • As your Registered Agent, we will send you tax reminders both by mail and email, well in advance of the due date.
  • The tax is then often calculated to the minimum payment of $400 tax plus the $50 annual report fee, for a total of $450 due per year.
  • The franchise tax is due even if the business didn’t conduct any activity or lost money.

Harvard Business Services, Inc. guarantees your annual Delaware Registered Agent Fee will remain fixed at $50 per company, per year, for the life of your company. The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurs, startups and general business topics. If you need assistance in obtaining a Certificate of Good Standing, we can help you receive your certificate in two business days or less. After paying their Delaware Franchise Tax, many business owners require a Delaware Certificate of Good Standing. The due date of your Delaware Franchise Tax payment varies, depending on your company type.

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

The annual report fee is $50 and the tax would be somewhere between $200 and $200,000 per year, as illustrated below. A corporation with 5,000 authorized shares or less is considered a minimum stock corporation. The Delaware annual report fee is $50 and the tax is $175 for a total of $225 due per year. The Delaware Franchise Tax for a corporation is based on your corporation type and the number of authorized shares your company has.

comments on “Delaware Annual Franchise Tax”

The $300 tax must be paid by every LLC formed in Delaware, regardless of income or business activity. Since 1981, Harvard Business Services, Inc. has helped form 382,011 Delaware corporations and LLCs for people all over the world. This is not the same as your Delaware annual report and will not mention internal company information, such as director or officer details. 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.

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The Delaware Franchise Tax has no bearing on income or company activity; it is simply required by the State of Delaware to maintain the good standing status of your company. If you’re ready to file and pay your Delaware Franchise Tax now, please visit our online Franchise Tax payment form. We also recommend putting a repeating reminder on your calendar because even if you don’t receive a reminder notice, it’s still your responsibility to pay the tax every 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. If the tax is not paid on or before March 1, the state imposes a $200 late penalty, plus a monthly interest fee of 1.5%.

DELAWARE LLC GUIDE

In order to utilize this filing method, you will need to provide the company’s total gross assets (as reported on Form 1120, Schedule L) and the total number of issued shares. The tax is then often calculated to the minimum payment of $400 tax plus the $50 annual report fee, for a total of $450 due per year. A corporation with 5,001 authorized shares or more is considered a maximum stock corporation.

Delaware LLC Annual Franchise Tax Payment Instructions

In the “Payment Type” drop down list select whether you will pay with your checking account or with a credit card. Reminders The state will send reminder notifications by mail to your LLC’s Registered Agent. After you form a Delaware LLC, you will have annual requirements to keep track of.

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