Your Effective Date Affects Your Franchise Tax

By Andrew Millman Monday, November 4, 2019

Delaware Franchise Tax

Are you ready to form your Delaware Corporation, Delaware LLC, or Delaware Limited Partnership for your new business and need a Delaware Registered Agent? Great. That’s why we’re here!  At Harvard Business Services, Inc., we make the process seamless. 

Traditionally, the first step is deciding when the time is right for your company. The birthday of your brand-new company. When it is close to the end of the year, you have a decision to make in regards to when you file the Certificate of Formation, Certificate of Incorporation, or Certificate of Limited Partnership with the Delaware Division of Corporations. Why does it matter? Because your company’s inception date effects when the franchise tax is due.

If you file your company with the Delaware Division of Corporations at any time during the 2019 the calendar year, with an effective date in 2019, your Delaware franchise tax is due starting in 2020. The franchise tax and annual report is due March 1st each year for Delaware Corporations. These are due June 1st for Delaware LLCs and Limited Partnerships.

A little known secret about incorporating a company with the Delaware Secretary of State Division of Corporations is that you can file your documents starting in early November and designate the effective date of filing as January 1st, 2020.  This is accomplished by adding an Article to the certificate. Essentially, you file now, but pay later. This comes in handy if you’re on a tight budget, which is common in early stages. It is also useful, if you see an upcoming investment opportunity, but are not certain how soon your new company is needed.  We can file for you so that your business becomes effective January 1st, 2020, and your franchise tax is not due until 2021.

If you’re ready to get the ball rolling on your new Delaware Corporation or LLC please reach out to Harvard Business Services, Inc. today.  Our friendly staff is here for you.  You can call us at 1-800-345-2677 ext. 6133 or you can reach us via email at sales@delawareinc.com if you prefer.  We’re ready to help!

Disclaimer

THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE'S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.

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There is 1 comment left for Your Effective Date Affects Your Franchise Tax

Nancy Nudel said: Wednesday, November 6, 2019

Can we still get an EIN number now , if the effective date of the new company will be 01/01/2020?

HBS Staff replied: Wednesday, November 6, 2019

Yes, you can obtain your EIN even if your effective date is not until the new year.

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