6 Common Delaware Annual Report Questions

If you have an incorporated company, then you probably are filing some type of annual report with your state government on yearly basis. Just about every state requires companies to file a report and/or pay a fee annually or bi-annually, which is commonly called a “Franchise Tax.”

Every company that is incorporated here in the State of Delaware is required to file a Delaware annual report and pay a Franchise Tax fee each year. This annual report filing applies to the following types of companies: General, Close, Non Stock and Exempt/Non-Profit. While Exempt/Non-Profit companies do not pay a franchise tax, they must still file an annual report.

What information must be provided on the actual annual report? 

The State of Delaware asks for a few basic internal details about the company. The items required to be reported are:

• Principal place of business-the physical location of where the company is located
• Name and address of one officer-typically a President, Vice President, Secretary or Treasurer
• Names and addresses of all directors-if none elected yet, then the report can reflect zero
• Authorization-by an officer or director to file the annual report

If the company has more than 5,000 shares authorized then there are couple more items to provide on the annual report:

• Total gross assets-which are reported on the company’s Federal Tax Return Form 1120
• Total issued shares-that can be found in the company’s stock transfer ledger

What happens when you are ready to file the annual report and the information has not changed from the prior year? 

For a lot of companies, the information that has to be reported is the same each year. Our clients are always asking if they need to fill out an annual report if the information is the identical as the prior year. As per the Delaware Code, the details must still be provided on the annual report each and every year to keep the company in compliance. It is unacceptable to file an annual report marked “same as last year”. Therefore, regardless if there are any changes within the company throughout the year or not, a completely new annual report must be filed.

Where does the annual franchise tax report information get filed?

Our clients want to know what happens with the details listed on the actual annual report. The report is filed with the Delaware Secretary of State’s office, just like the company’s original Certificate of Incorporation. It remains part of the company’s official filing history, just like any other type of filing the company had done and every type of corporate document the company ever obtained. Every annual report that is paid and filed for the company is always kept on record.

Who can see the details that are filed on an annual report?

The company must provide some basic internal details on the annual report. The state of Delaware requires (1) the principal place of business, (2) names and addresses of all directors, (3) name and address of one officer and (4) authorization to file the annual report by a director or officer. Some maximum stock companies (those companies with over 5000 authorized shares) must also provide the total gross assets and total issued shares on the annual report.

Every annual report and the information listed becomes part of the official filing history of the company. The annual reports are electronically stored with the secretary of state’s office and the reported details cannot be viewed publicly. Therefore, it is not possible to see a filed annual report online with the state of Delaware.

How can a copy of a filed annual report be obtained?

Perhaps the details of the company officer and/or directors need to be provided for banking or contract purposes. The state of Delaware does not maintain an online database that allows anyone to view a copy of documents on file for a company. Therefore, in order to obtain a copy of a filed annual report, the document must be requested from the secretary of state’s office for a fee. The document is issued in black and white, just like all other state documents, so it can be printed and used immediately. Even though a copy of a filed annual report can be obtained, any information regarding a company’s total gross assets and total issued shares will not be disclosed. Therefore, for the specific companies that must provide this information on their annual report, those details will still remain private.

What if the information on an annual report needs to be modified?

Sometimes the details that are listed on an annual report can change throughout a year. For example, a director may resign, a new secretary may be elected, or there could be a change of principal place of business address for the company. In this case, an amended report needs to be filed to update the information previously filed. A completely new annual report must be filed in its entirety to replace the previous annual report on file. It is not acceptable to file a partial amended annual report that simply indicates the new details to be updated. The state of Delaware will allow an amended report to be filed up to one year after the date of the originally filed annual report.

Harvard Business Services can assist in obtaining a copy of a previously filed annual report or file an amended annual report for a company. Contact our office and we would be happy to help with any questions or requests.

We offer a Franchise Tax filing service to help you file the annual report each year with the state of Delaware. Contact us at 1-800-345-2677, or 1-302-645-7400, Extension 6904 with any additional questions regarding the annual report filing. Or send an email to payments@delawareinc.com and we would be glad to assist.