His work has intermediate accounting iii been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf. The Delaware Franchise Tax is a very important part of the state’s revenue, and it is crucial that you pay it on time and in full. If you have any questions about the tax or how to pay it, be sure to consult the official website or contact the Department of Finance.
Since 1981, Harvard Business Services, Inc. has helped form 427,401 Delaware corporations and LLCs for people all over the world. The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurs, startups and general business topics. After paying their Delaware Franchise Tax, many business owners require a Delaware Certificate of Good Standing. Read on to find out how much you’ll pay, or visit our Delaware Franchise Tax calculator app for a quick answer. If you need assistance in obtaining a Certificate of Good Standing, we can help you receive your certificate in two business days or less. The Franchise Tax for a Delaware LLC or a Delaware LP is a flat annual rate of $300.
Delaware Franchise Tax: What Is It and How Do I Pay It
- If your company is no longer operating, it’s important to close your Delaware business and end these fees.
- 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.
- Failure to pay the annual franchise tax can result, in penalties, fines, or even the loss of right to conduct lawful business.
- The amount of the tax is based on the gross receipts of the business, and it is typically paid annually.
- If a corporation has less than 1,500 shares, it has to pay $350 for every 1,000 shares.
Every corporation that is incorporated in Delaware or does business in Delaware has to pay the Delaware Franchise Tax. 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. Our annual Registered Agent Fee is $50 per year, and is due on the anniversary month of the formation of your company.
What happens if I don’t pay the Delaware Franchise Tax on time or in full?
If you have moved your business out of state, or if your business has been dissolved, you may be eligible for a refund of the tax that you have already paid. However, if you are still doing business in Delaware but have simply changed your business structure, you will not be eligible for a refund. If you are unsure whether or not you are eligible for a refund, you should contact the Delaware Division of Revenue to discuss your specific situation. The corporation may be subject to interest and penalties, and its ability to do business in the state may be affected. As a result, it is important to make sure that the Franchise Tax is paid on time and in full to avoid any negative consequences. 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.
What are some of the exemptions from the Delaware Franchise Tax?
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. 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.
Who has to pay the Delaware Franchise Tax and how much is it?
In addition, every corporation that is incorporated in Delaware or does business in Delaware has to file a yearly report with the state of Delaware. The report is due by March 1st and must include information about the corporation’s assets and liabilities. 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 7 types of alternative investments everyone should know of your business.
The State of Delaware allows you to pay the lower of the two Delaware Franchise Tax calculation methods. The due date of your Delaware Franchise Tax payment varies, your total costs for health care depending on your company type. He has written extensively on subjects such as contract law, company law, and intellectual property.
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. The Delaware Franchise Tax also applies to LLCs and partnerships, but it does not apply to sole proprietorships or non-profit organizations. For more information about the Delaware Franchise Tax, please visit the Delaware Department of Revenue website.
