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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 calculations.
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.
*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 source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.