All companies formed in Delaware must pay an annual Delaware Franchise Tax. Learn more about Franchise Tax.
We are pleased to unveil the newest addition to our extensive list of helpful and informational tools. You can now determine the cost of the state of Delaware annual Franchise Tax fees using our Franchise Tax Calculator.
Our new Franchise Tax Calculator can compute the amount of Franchise Tax Fees due for all types of entities, including corporations, LLCs, LPs and exempt companies.
You can use the Franchise Tax Calculator to compare the amounts due between different entity types, or perhaps you are trying to figure out how much your Franchise Tax Fee will be based on the difference scenarios of stock your new company has authorized.
For example, what if you are trying to decide between forming an LLC or a minimum stock corporation (which has less than 5,000 authorized shares) and want to know the potential annual Franchise Tax Fee.
Using our new Franchise Tax Calculator, you would be able to see that the annual Franchise Tax Fee due for an LLC is $300 per year. You would also be able to see that a corporation with 4,000 authorized shares will owe $175 for its annual Franchise Tax Fee.
This cost differential may not be a deal breaker, but at least you can gauge what your annual Franchise Tax Fee will be for a particular entity.
Or, let’s say you currently own a minimum stock corporation and would like to increase the number of authorized shares. Perhaps you need to sell the stock to investors for capital, and you want to know the potential Franchise Tax liability with the increased number of authorized shares.
A corporation with less than 5,000 authorized shares will owe $175 in Franchise Tax. However, with potential investors, you company now needs 1,000,000 authorized shares at a $5.00 par value per share.
Since there are two methods to calculate the Delaware Franchise Fee due, you will need to provide some additional information to determine the correct amount due. If there are 500,000 issued shares and $50,000 gross assets, the Franchise Tax Calculator will indicate that the estimated amounts due are $1,750 or $7,675, depending on which method used on the annual report filing.
Quite the difference in the amounts due, but don’t stress. The state of Delaware will allow you to file the annual report using the lesser of the two methods.
While the calculator will provide the Franchise Tax amounts due for an endless variety of options, it is not an exact science. The actual amount payable to the state of Delaware is ultimately dependent on your company’s specific internal details.
For instance, if your company owes a past due Franchise Tax balance, obviously that is not factored into the general calculator. In addition, if your company filed any type of stock amendment, renewal or conversion, any of these filings will have an effect on the exact amount of Franchise Tax due.
The final calculations could also be influenced by corporations with multiple classes of stock. Don’t forget that corporations need to add a $50 annual report fee that is imposed by the state of Delaware.
We hope you find our new Franchise Tax Calculator convenient and helpful. If you have any questions about Delaware Franchise Tax, please feel free to email us.
All Delaware LLCs and LPs must pay their annual Franchise Tax Fee on or before June 1. The state of Delaware currently issues its official LLC/LP Franchise Tax notices as a white, paper report. As your Delaware Registered Agent, Harvard Business Services, Inc., which represents over 39,000 Delaware LLCs and LPs, receives, sorts and mails all those paper notices to our clients.
By now you should have received the official notice; please note, however, it is possible you will receive your Franchise Tax notice after you have already paid online or over the telephone. If you’re unsure, please feel free to contact our Franchise Tax Department. The infographic below contains FAQs to further assist you.
We go above and beyond what our competitors provide and also offer a unique Delaware Franchise Tax filing service.
Each year, thousands of people utilize our services in order to process their annual state of Delaware Franchise Tax reports.
Even if we are NOT your registered Agent you can still use our system to pay your Delaware Franchise Tax.
We are excited to announce that in an effort to improve our clients’ user experience, it is now possible to submit annual Franchise Tax payments for multiple LLCs and Limited Partnerships in a single transaction.
Since many entrepreneurs own more than one LLC (or LP), we listened to our clients’ feedback—you can now take care of your annual Franchise Tax obligations in one streamlined, user-friendly process.
Our new multiple LLC/LP payment page is here. The procedure is both straightforward and uncomplicated, which means less hassle.
You will first need to enter some basic contact details, in case we need to reach you with any questions. Keep in mind that the email address entered on this page will be where your confirmation and receipt will be sent.
In order to fill out the payment form, you will need to know your Delaware state file number as well as the name of your first LLC/LP. Once you have entered your first LLC/LP entity, click the +Add Company button.
You will be prompted to enter the Delaware state file number and company name of each LLC/LP for which you would like to pay Franchise Tax.
After all your business entities have been entered, click the Continue to Next Page button. The next page will provide a breakdown of each of your LLCs/LPs, including the payment due for each. If the information is correct, move forward to the next page. However, if you need to make any changes, you can use the appropriate Edit/Delete options.
The subsequent page is a review summary—here you’ll have one more opportunity to ensure the accuracy of the information you submitted. On the next page, you’ll provide payment arrangements for the total amount due, and then place your order, after which you will receive an email receipt for filing your Delaware Franchise Tax with us.
If everything is in order, we will proceed with filing your Franchise Tax with the state of Delaware. You will receive an additional, separate email confirmation once the filings have been approved by the state.
Keep in mind that this new website section is only for making Franchise Tax payment arrangements for multiple Delaware LLCs/LPs at one time. If you need to make filing and payment arrangements for a Delaware corporation, you should visit our standard payment page.
Do you own or operate a Delaware corporation? (Not an LLC.) The deadline for the annual corporate Franchise Tax report is March 1 of each year. Have you filed and paid for your Delaware corporation’s annual Franchise Tax report yet?
If not, Harvard Business Services, Inc. can help you stay in compliance and complete the filing by the impending due date. [Please note that LLC/LP entities have a different deadline, which is June 1.] If you do not file and pay your company’s Franchise Tax by March 1, you will incur a $125 late penalty as well as a 1.5% monthly interest fee added to the overdue balance.
Your corporation will also lose its Good Standing status in Delaware.
The annual corporation Franchise Tax report must be filed and paid every year. Do not be fooled into thinking your company does not have to pay the Franchise Tax for any reason. This annual obligation is required, even if:
To put it simply, if you own a Delaware corporation, the annual Franchise Tax report must be filed and paid by March 1 of every year.
Harvard Business Services, Inc. has the expertise to assist with the filing of your annual Delaware Franchise Tax report. The fastest and easiest way to get this accomplished is online.
Once we have received your online order, we will submit your corporation’s Franchise Tax filing to the state of Delaware. You will then receive a copy of the documentation for your records.
We are happy to help you file your annual Delaware Franchise Tax report; however, please keep in mind that our office processes thousands of Franchise Tax reports, so in order to make sure all the filings are processed on time, we must enforce a cut-off time for accepting new orders. Therefore, please take note of our office schedule for March 1, 2016:
After 8 PM EST on March 1, 2016, we will no longer be able to accept any Franchise Tax filing requests of any kind. You will need to contact the state of Delaware directly in order to make payment arrangements. The state of Delaware’s contact details are:
Don’t wait until the last minute to submit your annual Franchise Tax report filing. Let Harvard Business Services, Inc. take care of it for you today.
Whether it was to fulfill a dream or purely for investment purposes, you established a Delaware company, and now you may have concerns regarding the maintenance of your business entity and what you are required to do for it on a regular basis.
One of the annual requirements is the filing of an annual Delaware Franchise Tax report. Don’t let either word—“franchise” or “tax”—frighten you; Harvard Business Services, Inc. is here to answer the Top 10 Franchise Tax questions.
1. What is Franchise Tax? The term may make it seem like you own a Chipotle or Pizza Hut franchise, but that is not the case at all. “Franchise Tax” is just the term the Delaware Secretary of State gave to the annual fee.
2. Do I have to pay the Franchise Tax? Yes. Every business entity that is formed in Delaware is required to pay Franchise Tax each year.
3. Do I still owe Franchise Tax if my company does not have any profits that year? Yes. Your company owes Franchise Tax every year, regardless of whether or not your company has started making money, opened a business bank account or filed a federal tax return. If your company is formed in the state of Delaware, you must pay the annual Franchise Tax.
4. Do I have to pay the tax if I just formed my company? Yes. The state levies the Franchise Tax in the same fashion as the IRS levies your income tax, meaning it is paid in arrears. So if you formed your company this year, the first Franchise Tax filing will be due the following year. You do not have to pay the Franchise Tax in the same year that your company was established.
5. Is the Franchise Tax the same as federal income tax? No. Delaware Franchise Tax is completely separate from your federal income tax filing. We will gladly provide assistance with your Delaware Franchise Tax filing; however, you will need to consult your CPA or Accountant for assistance with your federal income tax filing.
6. How much is my Franchise Tax? The amount due is dependent upon several variables. If your company is an LLC or LP, then the standard, flat rate is $300 per year. If your company is a corporation, then the amount due will be between $225 and $180,000 annually. The exception would be an exempt entity, such as a religious organization, church or foundation, which only has to file an annual report at a reduced rate of $25.
7. Why is the corporation Franchise Tax bill so high? Don’t fret—the vast majority of corporations pay somewhere between $225 and $400 for their Franchise Taxes each year. Click here for a calculator to generate an estimate on how much your taxes may be.
8. When is the Franchise Tax due? The fee for a corporation is due by March 1 of every year; the fee for an LLC or LP is due by June 1 annually.
9. What happens if I don’t pay by the deadline? The state of Delaware will assess a late penalty, plus interest, for all late filings. For a corporation, the late penalty is $125 plus 1.5% monthly interest; for an LLC, the late penalty is $200 plus 1.5% monthly interest.
10. How can I file and pay my company’s Franchise Tax? Just go to www.delawareinc.com/payft and complete the online form.