Delaware Entity Annual Maintenance

By Amy Fountain Tuesday, August 13, 2013

After you have formed a Delaware entity, there are numerous in-house tasks to tackle. Establishing a budget and determining the annual expenses for the entity could be at the top of your To Do list.  By determining the yearly costs associated with the business early on, you can avoid the surprise of discovering unknown fees later.

It is pretty simple for entities formed in the state of Delaware, because there are only two fees that are required to be paid each year.

The first fee is the annual Franchise Tax, which is imposed upon every Delaware company by the state of Delaware. The amount that is due and when it is due is dependent on the type of entity you have formed.

  • For corporations, the Franchise Tax Fee is due by March 1 annually. The amount varies depending on the type of corporation you have.  Typically, most corporations are minimum stock, which means there are less than 5,000 total authorized shares of stock. In this case, the Franchise Tax Fee is $225 per year. Again, depending on the type of corporation and its stock structure, the amount of Franchise Tax can vary.
  • For an LLC/LP, the Franchise tax Fee is due by June 1 annually. The amount is a flat rate of $300 for every LLC/LP.
  • For all entity types, the state of Delaware will impose a late penalty plus monthly interest if the fees are not paid by the respective deadlines. But don’t worry, Harvard Business Services, Inc. will send you ample notices to remind you of the due dates. You will receive monthly written notices approximately 5 months before each deadline. In addition, we will send numerous email notices with the respective due dates so you are able to make arrangements in plenty of time.

The second fee is the annual Registered Agent Fee, which is our fee for acting as the Registered Agent for your entity in the state of Delaware. We are the lowest priced Registered Agent in the state, and only charge $50 per year for this service. We also give you a full year of Registered Agent service, and invoice on the 28th day of the anniversary month of the entity. For example, if the entity is formed on April 1, then the $50 fee is due by April 28 every year. Once you have made the payment, the fee will not be due again until April 28 of the following year. Some agents only extend the service through December and then bill you a second time. Again, we will provide you with notification a couple of months prior to the due date via regular mail and email regarding this annual fee.

When the time comes, both of these annual fees can be paid via our Client Center.

Now you know what annual expenses will be payable in Delaware for your entity. Best of luck!

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