The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
If you own a Delaware Limited Liability Company (LLC) or Limited Partnership (LP), then the date June 1, 2015 is critical to your entity.
Every LLC or LP formed in the state of Delaware is required to pay the annual Franchise Tax Fee in order to maintain compliance. The minimum amount due for the Franchise Tax is $300 per entity, per year.
If the Franchise Tax filing is not received by the deadline, the state of Delaware will automatically add a $200 late penalty, plus interest.
Harvard Business Services, Inc. offers a service, for an additional fee, to assist with the filing of your company’s annual Franchise Tax. If you have not paid your Delaware Franchise Tax yet, you need to take care of this immediately. You can make your payment securely on our website via this link, www.delawareinc.com/payft.
Every year, we process thousands of Franchise Tax filings in a timely manner with the state of Delaware.If you use our service to pay your Delaware Franchise Tax we guarantee on time payment, or we will pay your penalty. In order to guarantee this, we must enforce a deadline. This deadline allows us to accurately process all filings in our possession before the state of Delaware’s deadline.
After 8 PM EST on June 1, Harvard Business Services, Inc. will no longer be able to accept any Franchise Tax payments in any form. All payments after this time will need to be filed directly with the state of Delaware. You will have to contact the state office directly in order to make payment and filing arrangements. The contact details are as follows:
If you have any questions about Franchise Taxes and the deadline, please telephone our office at 1-800-345-2677 or 1-302-645-7400, Extension 6904. You can also email your questions to firstname.lastname@example.org.
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Clients from all over the world form Delaware LLCs in order to take advantage of Delaware’s corporate law structure, which is widely considered the strongest in the world. The only requirement is that you maintain a Registered Agent in Delaware. Harvard Business Services, Inc. has helped thousands of companies by acting as a Registered Agent, for just $50, per year since 1981.
When operating a Delaware LLC in another state, such as Colorado, clients should register their businesses as a foreign entity in that state. Each state has different requirements. Colorado, like most states, requires an application process and a state filing fee. Unlike most states, however, it does not require a Certificate of Good Standing from Delaware. Colorado does require a Registered Agent in the state. Harvard Business Services, Inc. can act as your company's Registered Agent in Colorado for $99 per year. We can also assist with the application process to register your Delaware LLC as a foreign entity in Colorado.
Colorado does not have a publishing requirement unless specifically required by the county of your registered agent.
Why register in Colorado if my company was formed in Delaware?
The Foreign Qualification process is the way in which the state of Colorado grants you permission to operate with a Delaware LLC. The Foreign Qualification process enables a company to transact business in a jurisdiction other than where it was formed. By failing to comply with local compliance issues, you may be putting your company at risk.
After completing the Foreign Qualification process, you will receive a document from the Colorado Secretary of State called a Certificate of Authority. It states that Colorado grants your business the authority to operate in Colorado with a Delaware LLC. It is often a prerequisite for many business licenses in Colorado. This document is also required by banks before your company can open a bank account in Colorado.
Once registered in Colorado, you are responsible for the annual compliance fees. Colorado mandates a periodic report, which costs $10. You can sign up for Colorado's email reminder system once registered there.
If you have any additional questions about registering your Delaware LLC as a foreign entity in Colorado, or if you need assistance with the process, please contact Harvard Business Services, Inc. at 1-800-345-2677, Ext 6130 or email email@example.com.
However, this can also be a daunting time, because you are making a number of significant decisions, filing a lot of paperwork and trying to devise a budget. You are no doubt sifting through a multitude of information and you may find it difficult to keep track of all the moving parts, including the important due dates.
If you read our weekly Harvard Business Services, Inc. blog, you will notice there are several posts regarding annual Franchise Tax fees. You may be wondering if these fees pertain to your entity, and here is the answer: any entity that is formed in 2015 does not actually have to pay Franchise Tax fees in 2015.
The state of Delaware imposes Franchise Tax fees in the same manner that the IRS files income tax returns. Essentially, your business files this year’s report in the following year. Thus, if an entity is formed in 2015, the first Franchise Tax filing will be due in 2016; the 2016 Franchise Tax filing will be due in 2017, and so on.
Specifically, the Franchise Tax fee deadline for all incorporated entities is March 1 of each year, and the Franchise Tax fee deadline for all LLC entities is June 1 of each year.
This situation is typically the same for entities that file a renewal for void or forfeiture. If an entity is restored in 2015, then the first Franchise Tax filing will be due in 2016.
With so many costs involved in starting a new company, it can be a relief to know you may not have to worry about a Franchise Tax expense until next year.
If you formed your new entity with Harvard Business Services, Inc., here is another moment of relief: your first year’s Registered Agent fee is included in our formation package, so the fees you paid included one year of Registered Agent service. Thus, you will not have to pay this fee until one year from the date of the entity formation.
While it may feel like your new business is consuming all your resources, it can be comforting to know the annual Franchise Tax and Registered Agent fees are generally not affecting your company’s budget this year.
If you have any questions about annual fees your entity may owe, please feel free to call Harvard Business Services, Inc. at 1-800-354-2677 or email us at firstname.lastname@example.org. Our knowledgeable representatives will be happy to further research and clarify any concerns you may have.
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What is a Certificate of Good Standing? When (and why) would you need to order a Certificate of Good Standing for your Delaware company? We hear these questions from clients almost daily. The Certificate of Good Standing is a declaration issued by the Delaware Secretary of State and announces that your company has been legally created and exists as a Delaware company in “Good Standing.” It simply affirms that the referenced entity is current with the Delaware Franchise Tax and has filed all the appropriate paperwork (Annual Reports) with the State of Delaware Division of Corporations.
From time to time, clients will need to obtain a Certificate of Good Standing for their Delaware Company for any number of reasons. All banks routinely require them at the closing of a real estate financing and when making loans, letters of credit and lines of credit to corporations and Limited Liability Companies (LLCs). Some banks even require a company to provide a Certificate of Good Standing when opening a bank account.
If you plan to file an Application for Authority to do business in another jurisdiction with a Delaware Company, other states routinely require that a Certificate of Good Standing from Delaware accompanies the registration.
Some clients order a Certificate of Good Standing for their records after they pay the Delaware Franchise Tax each and every year. This proactive record-keeping practice helps to ensure that your company's records are readily available for your attorney, accountant or banker.
A Delaware Certificate of Good Standing can be ordered directly from Delaware for $50. The state will send you, by mail within 2 weeks, a hard copy document. However, Harvard Business Services, Inc. can obtain your company's Certificate of Good Standing from the State of Delaware and electronically send it to you, typically within 24 hours. If the matter is urgent and you need the Certificate of Good Standing immediately, we also offer same-day and 2-hour express options.
Call Harvard Business Services, Inc. at 1-800-345-2677, Option 2 or go online to https://www.delawareinc.com/ourservices/certificate-of-good-standing/ to order your digital Certificate of Good Standing from Harvard Business Services, Inc.
It’s 2015, and we’re entering an entirely new frontier. Legal marijuana is now the fastest growing industry in the United States. Similar to the dot-com boom in the late 1990s and the real estate explosion in the early 2000s, the burgeoning marijuana industry--especially marijuana dispensaries--has been skyrocketing. The marijuana industry is thriving, and with it comes the opportunity for many people to prosper. We at Harvard Business Services, Inc. have noticed an influx of new companies that are popping up in order to get in early on the legalized marijuana industry. With rapidly growing new markets, such as marijuana edibles, marijuana accessories, cannabis research and development and various cultivation methods, the expansion of this new “Wild West” industry, has limitless potential in states where marijuana has been legalized. However,as with any new industry, many of these new start-ups will flourish while others won’t last more than a couple of years. One significant but often overlooked element can determine the longevity of any start-up company: investors.
There are many investors just waiting for the next exciting, profitable business prospect who want to invest early in order to maximize their return. What attracts potential investors? A great product, of course, as well as a sound business plan. Another good way to attract potential investors is by filing the company in the state of Delaware. Delaware continues to be recognized around the world as the best state in which to incorporate a business. Some potential investors are more likely to invest in a start-up when it’s a Delaware Corporation. In fact, most venture capital firms will only consider investing in a start-up company that is a Delaware Corporation. Why not raise your company above the competition, making it as enticing as possible, by setting it up in the state of Delaware?
Four states--Colorado, Washington, Oregon and Alaska--have legalized marijuana for both medicinal and recreational use; several other states have legalized marijuana for medicinal use only but decriminalized it. It is very likely that more states will be following one or both of these trends in the near future. However, as of today, non-medical marijuana is still illegal in Delaware, so the use of the word “marijuana” is not permitted in corporate names.
If you have any questions about forming your new Delaware corporation or LLC through Harvard Business Services, Inc., reach out to one of our friendly customer service representatives today at 800-345-2677. We’re ready to help.