The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
Harvard Business Services, Inc. is pleased to announce that we have now served 120,000 companies. This is another milestone in our 33 years in business. Since 1981, our goal has been to maintain a long-term relationship with all of our clients. To date we have more than 40,000 current clients that we act as the registered agent for in Delaware. We offer FREE lifetime customer support throughout the life of the company and our $50 annual registered agent fee has remained at $50 since 1981. It's guaranteed never to increase for the life of the company.
Our founder and CEO, Rick Bell said about the recent accomplishment: “Our clients are the most interesting people in the world. There’s an excitement surrounding people who form their own companies. Some call them dreamers but here at Harvard, we know that many of their dreams come true.”
Our director of U.S. sales, Brett Melson said: “Without knowledgeable, friendly and dedicated team members we would have never been able to achieve 120,000 companies served.”
Our director of marketing, Michael Bell said: “What an accomplishment. It is a testament to my father (Rick Bell) for envisioning a dream and putting it all together, and to our staff who day in and day out work to provide you with the best customer service.”
From all of us here at Harvard Business Services, we want to say thank you for all your support over the last 33 years. We appreciate your business and look forward to working with all of our customers well into the future. Whenever you should require our services again, we are here to assist.
The air is crisp, the leaves are turning red and gold and the kids are back in school. For sports fans, this means football season is also in full swing. For business owners, it is a reminder about taking care of annual business obligations. It may not be as fun as watching your favorite team score a touchdown, but it is something that has to be taken care of.
If you have a Delaware corporation, such as an Inc., Ltd., Co., Company, etc., then you need to plan now for the annual Delaware corporation franchise tax fees due. This summer, the state of Delaware passed legislation to increase the amount of franchise tax fees due for a corporation. So if you already budgeted for a certain amount, you need to make adjustments.
Every domestic Delaware corporation that has 5,000 authorized shares or less is now assessed $175 franchise tax fee per year. The annual report fee is $50, so the minimum amount due is now $225. This is an increase of $100 from last year.
Every domestic corporation that has more than 5,000 authorized shares, but less than 10,000 authorized shares is now assessed $250 franchise tax (instead of the previous amount of $150) plus $75 on each 10,000 authorized shares or part thereof. There is also the annual report fee of $50.
The increased taxes went into effect for the 2014 tax season, so these are the new corporate franchise tax rates that will be due March 1, 2015. (Please visit our franchise tax informational page for information on the Delaware franchise tax.) To make things easier for you, we provide an online service for you to file and make payment arrangements for the annual franchise tax fees. All you need to do is go to our website at www.delawareinc.com/payft/ to complete the annual report and provide your payment details. If you’d rather call our office and deal with a franchise tax specialist just dial 1-800-345-2677. We will handle the filing with the state of Delaware and guarantee on-time payment. We’ll also send you a receipt for the proof of payment, all for a nominal fee.
By the way, our fee to file the company’s tax and guarantee on-time payment has not increased, but the sooner you take care of it, the less it’s going to cost.
So call now (800-345-2677) or go online. Once you have tackled the franchise tax responsibilities for your Delaware corporation, you can sit back and watch some more football. Go team!
"I can't find my EIN!"
"How do I find my EIN?"
"I lost my EIN!"
We receive calls like this from panicked business owners all the time, frazzled and upset because they can't find their EIN.
If you know you have applied for an Employer Identification Number or EIN (also known as a Federal Tax ID Number) but have misplaced it, you have several options.
If we obtained the EIN number on behalf of your company, we can provide the number to you over the phone if you call our toll free number at 800-345-2677.
If we did not obtain your EIN, look back in the early records of your business. When you first applied for an EIN, the IRS issued you a computer-generated notice. This confirmed your application and also served as a receipt of the EIN.
If you can't find your EIN in your records, the next option is to contact your bank, because a Federal Tax ID Number was required to open the business account and your bank should have it on file.
In addition, if you applied for any local or state license, that agency should have your EIN on record, as well as on any correspondence regarding your business.
Finally, if you have exhausted these methods and are still unable to locate the EIN for your business, you can ask the IRS to search for it. This can be accomplished by calling the Business & Specialty Tax Line at 800- 829-4933. The IRS is available Monday - Friday, 7 AM - 10 PM.
The representative will ask you some questions to make sure you are an authorized person for your company, such as a member's, corporate officer's or director's name. When this has been established, the IRS representative should be able to provide the number to you over the telephone.
Be prepared to spend some time on the phone waiting, since it is the IRS, after all.
Buyouts of large companies have been dominating news headlines recently. These are just a few that we spotted in one week:
"Zillow to Acquire Trulia for $3.5 Billion"
The merger of these competitors will create a giant repository for online listings for real estate and home values.
"Dollar Tree to Buy Family Dollar for $8.5 Billion"
With this acquisition, Dollar Tree will become North America's biggest discount retailer.
When big company acquisitions and mergers take place, Delaware is typically involved. That’s because 60% of Fortune 500 companies, 50% of publicly traded companies, and 50% of all American corporations are based in Delaware. You can find the words, "a Delaware company," on the first page of SEC filings from such giants as Facebook, Kayak, Twitter, Apple, American Airlines, Wal-Mart, Bank of America, JP Morgan Chase, Berkshire Hathaway, Google, Cargill, General Electric, Coca-Cola, Halliburton, Ford...and the list goes on. Delaware has practically become synonymous with corporations and LLCs.
Ever wondered why companies incorporate in Delaware? Delaware attracts these marquee names—big corporations as well as small-time businesses—for several reasons.
The Delaware general corporation law has the most advanced and flexible corporate statutes in the United States, thus offering predictability and stability. It has been shaped over the years by corporate law experts and has been protected from special interest group influence.
The Court of Chancery is the very highly respected court which determines disputes involving the internal affairs of many thousands of Delaware corporations. A great amount of the world's commercial affairs are conducted through this court. With five very expert chancellors and no jury, complex business issues are decided here.
Cases from the Court of Chancery are appealed to the Delaware Supreme Court, which has five very experienced justices and is the ultimate word on Delaware law. These courts have a history of issuing reasoned and well thought-out opinions, allowing businesses to review prior cases to understand the impact they will make in the future.
The state legislature continually reviews business statutes and recommends updates which keep business laws current. The Secretary of State’s office has a customer service-oriented staff which exists to provide efficient and expedited service.
Delaware is known for having the most business friendly laws for starting and running a company, so there is no wonder that so many giants, as well as small businesses, want "home" to be in Delaware!
The State of Delaware General Assembly recently approved legislation that affects some business entity laws. A notable piece of legislation is House Bill 127 that amends Title 8 Sections 502(a) and 312(b). One section of this law pertains to the annual franchise tax report that is required to be filed for all corporations on a yearly basis. The other section of law relates to the authorization of the renewal and revival of a Corporation. Both of these law sections are specifically related to Corporations, and not Limited Liability Companies/Limited Partnerships.
The highlight of this bill prohibits an incorporator from signing an annual franchise tax report after the initial filing. This means that an incorporator has the ability to sign the initial annual franchise tax report for an entity, but cannot sign any further annual reports.
For example, if an entity was formed at any time in 2013, then it will be required to file a 2013 annual franchise tax report by March 1, 2014. If the entity has not elected any directors or officers by the time the annual report must be filed, then the incorporator has the option to sign the initial annual report. However, moving forward, the entity will need to elect directors and officers and one of those individuals will have the ability to sign the following year’s annual reports.
In addition, only an initial annual report can be filed with the Secretary of State’s office listing ‘no directors’. All subsequent annual reports will be required to list directors. An exception to this rule would be the filing of annual reports in combination with certain types of dissolutions.
The legislation was enacted by the State of Delaware to discourage the use of “shelf” or “Shell” companies. These shell companies can sometimes be formed, maintained and renewed without listing any internal management or ownership details. The new law limits the powers of the entity’s incorporator for future filings in a couple of ways. First, as previously mentioned, the incorporator will only be able to sign an initial annual report for the entity. All future annual report filings must be signed by an actual officer or director of the entity. Second, any renewal or revival filed by an entity cannot be authorized by an incorporator. Instead, such renewal and revival certificates must be authorized by the entity’s directors or stockholders.
These specific legislative changes went into effect as of August 1, 2013.