It is that time of year again when all Delaware corporations must complete the annual report filing and pay the Delaware Franchise Tax. To help our clients with the process, we will discuss some common mistakes we see in the annual reports. We hope by highlighting these, filing your Delaware Annual Report can be completed without any errors.
A very common mistake is to list the registered agent’s address as the principal operating address for the business. Delaware will not allow the registered agent’s address to be listed and will require amendments to be filed if this happens. What the state is looking for is the actual physical location where the corporation is operating from.
Another mistake we see is incorrect share information being listed. An example is 10,000,000 shares showing issued one year on the annual report and then 0 shares showing issued the next year. This will trigger the state to request additional information about share issuance or require a correction to be filed. Either of these issues can affect the standing of your corporation. Clients may also claim Zero gross assets in multiple years. This will also trigger additional scrutiny and may require corrections to be filed.
Providing incorrect titles on the annual report, such as founder, legal counsel and/or manager instead of correct officer designations is another common issue that we see on Delaware Annual Reports. The correct titles should be assigned for accuracy. Providing updated information if officer/s and/or director/s have resigned or been replaced is important as well. If the correct information is not provided or if information from previous annual filings does not match, additional scrutiny of the report could take place.
The biggest and most common mistake we see is not filing the Delaware Annual Report by the March 1st deadline. Not only does this affect the standing of the corporation with the state, but it also triggers late fees and interest penalties on the franchise tax and annual report filings. Late penalties start at $200.00 as soon as one day after March 1st.
At Harvard Business Services, Inc., we are here to assist with filing the annual reports on your behalf. Our franchise tax filing fees range from $39.00 to $69.00. Please remember the earlier you complete the filings the lower the filing fee will be. Please call with any questions to 1-800-345-2677 Ext. 6904 or 302-645-7400 Ext. 6904 to speak to a member of our payments team. We are happy to help with your annual report questions and any other questions regarding our services.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such sourceâ€™s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.