One of the requirements of maintaining a corporation in Delaware is filing the Annual Franchise Tax Report. While LLCs, Limited Partnerships, and General Partnerships are not required to file an Annual Report, they will still have to report and pay Franchise Taxes. The Annual Report is used to confirm and update the company’s information with the Delaware Secretary of State, such as the name and address of the registered agent and principal office address. The Franchise Tax is assessed for the privilege of doing business in the State of Delaware.
Who Needs to File an Annual Report?
Domestic and foreign corporations and LLCs are required to file an annual report each year after the year the company was formed.
What is Needed to File a Delaware Annual Report
The filing of the Annual Report is done through the Delaware Secretary of State’s website.
The report asks for information such as:
- The Business Entity File Number. You can find your File Number by doing a Delaware entity search.
- Legal name of the entity
- Name and street address (P.O. Boxes are not allowed) of the Delaware Registered Agent
- Address of the Principal place of business (No P.O. Boxes)
- Names and titles of all managers, members, directors, or officers.
Annual Report & Franchise Tax Cost
The Delaware corporation’s Annual Report filing fee is $50, plus franchise tax fees. Franchise taxes for corporations are a minimum of $175. They are calculated using the Authorized Shared Method or the Assumed Par Value Capital Method, which are calculated based on the corporation’s number of shares.
The minimum annual tax for Delaware corporations is currently $175, using the Authorized Shares Method. The minimum Tax using the Assumed Par Value Capital Method is based upon the total number of issued shares and the total gross assets of the corporation, with a minimum tax of $400 and a maximum tax of $200,000 for both methods.
All Domestic and Foreign Limited Liability Companies, Limited Partnerships, and General Partnerships formed or registered in Delaware pay an annual tax of $300.
Annual Report Due Date
The State of Delaware has different deadlines depending on the business entity. Taxes are assessed if the corporation is active in the records of the Delaware Division of Corporations anytime from January 1st through December 31st of the current tax year.
Corporations: The Annual Report and Franchise Taxes are due March 1st of each year.
LLC/LP/GP: Franchise Taxes are due June 1st of each year.
The Delaware Secretary of State’s office sends a reminder notice approximately 60 days before the renewal deadline. Even though a reminder is sent, it’s important to make an additional reminder for yourself should you not receive it.
Delaware Annual Report FAQs
My business made little or no money. Do I still have to file the Annual Report?
Even if your Delaware LLC or corporation has received no income or business activity, the Annual Report and/or Franchise Taxes still need to be filed and paid.
What happens if you don’t file the Annual Report on time?
Corporations: Failure to file the Annual Report and pay the Franchise Tax will result in a penalty of $125.00 plus 1.5% interest per month.
LLC/LP/GP: Failure to pay the Franchise Tax will result in a penalty of $200.00 plus 1.5% interest per month.
If the Annual Report is not filed by the due date, the entity’s status will change to Bad Standing. For the entity to regain its good standing status with the Secretary of State, the tax and penalties must be paid, and a reinstatement form must be filed. The owners may be personally liable for not being in good standing should the LLC or corporation be sued. Should the company be delinquent for three years, the Secretary of State will dissolve the entity.
How do you change the Registered Agent?
While the Delaware Annual Report form asks for the registered agent’s name and address, the Registered Agent can’t be updated on this form.
Fill out the Certificate of Change of Agent Form to update the Registered Agent’s information for an LLC.
Delaware Secretary of State Contact Information
The mailing address for the Delaware Annual Report is:
Delaware Department of State – Division of Corporations
PO Box 898
Dover, DE 19903
If you have questions, they can be contacted at (302)-739-3073, option 3.
