The HBS Blog on Delawareinc.com provides Delaware incorporation information and general business news you need to know now.
What Happens If Your Delaware Company is Voided?
In order to keep a business entity in good standing status in the state of Delaware, an annual Franchise Tax Fee must be paid. The tax amounts and due dates vary, depending on the business entity type. However, the consequence for not paying the Franchise Tax Fee remains the same; the state of Delaware will take action against the business entity. For example, a corporation that does not file and pay its annual Franchise Tax report for two years in a row will automatically be voided by the state. An LLC (limited liability company) or LP (limited partnership) that does not pay its Franchise Tax Fees for three years in a row will be cancelled by the state.
What Does It Mean to Have a Business Entity Voided by the State of Delaware?
There are several ill effects of a voided or cancelled business entity. The Delaware Secretary of State will not issue any type of certificates, such as a Certificate of Good Standing, for the company. Generally, the activities of the business will remain in effect, such as any contracts or agreements established during the voided period. However, the company name becomes available in the Delaware database, and anyone else can form a new company with that name.
Unfortunately, many people end up facing this situation when it comes to taking care of the annual obligations for their business entities. They know there are mandatory payments, but daily life interferes before they realize they have missed the due dates, and as a result their entity has been voided.
What To Do If Your Company Has Been Voided?
First, don’t panic. The state will not pursue you, personally, for the outstanding Franchise Tax Fees. The Franchise Tax Fees are imposed on the business entity itself, thus it is the business entity that owes them to the state.
Second, the process to restore the company is relatively simple. Formal renewal documents should be filed with the Secretary of State, and the past due Franchise Taxes, late penalties and interest fees need to be paid. Once the renewal documents and appropriate fees have been successfully submitted and then approved by the Secretary of State, the business entity is restored—it is as if the company was never voided or cancelled.
If you need to renew your Delaware business entity, contact Harvard Business Services, Inc.. We will gladly research your specific situation and provide you with guidance in order to reinstate your company as swiftly as possible. You can call us at 800-345-2677 or email us at email@example.com.
Well that was fast! Another summer is coming to an end, but that doesn’t mean the great deals need to stop here at Harvard Business Services, Inc. For the entire month of August were going to continue offering a $40 discount off all our Delaware LLC, corporation and limited partnership formation packages.
The discount will be available starting at 12:00AM ET on August 1, 2015 and will expire at 11:59PM ET on August 31, 2015
To apply the $40 discount simply enter the word “Inc2015” when filling out easy-to-use online order form.
All of our Formation packages include the following:
To view and compare all formation packages you can go to Our Services page
Ready to start your business today? We have specialists who are ready to assist by phone (302)-645-7400 or toll-free 1-800-345-2677, by email firstname.lastname@example.org or live chat. If you wish to get started now you can go to our easy-to-use online order form.
People call us from all over the world wanting to form Delaware LLCs because Delaware is known for having the strongest corporate law structure in America. When you form an LLC in Delaware, your business is domestic to Delaware and foreign to every other state, including your home state. If you’d like your LLC to operate in any other state, such as Hawaii, you must register your company as a foreign entity in that state. This process is called Foreign Qualification, and it is the manner in which the LLC’s home state grants it the authority to do business there with a Delaware LLC.
Hawaii, like many states, has an application process and requires a state fee, as well as a Certificate of Good Standing from Delaware, in order to register your Delaware LLC as a foreign entity. Hawaii also requires your LLC to retain a Registered Agent in order to accept service of process within the state. Harvard Business Services Inc. can file for Foreign Qualification in Hawaii for you; in order to do so, we will need the following information:
Harvard Business Services, Inc. will prepare the application, obtain the Certificate of Good Standing from Delaware and email the documents to you for signature. The Certificate of Good Standing must not be dated more than 60 days prior to the filing. The application must be signed by a member or manager of the Delaware LLC. Once the signed application is received, Harvard Business Services, Inc. will file the documents with the state of Hawaii. The typical turnaround time for approval is five business days.
If you would also like Harvard Business Services, Inc. to act as your Registered Agent in Hawaii, we would be happy to do so. The cost is $99 per year. Once your LLC achieves Foreign Qualification in Hawaii, the LLC will be responsible for filing an annual report. This annual report is due a year later, no later than the end of the quarter in which you originally filed. (For example, if you registered your business in Hawaii on March 5, 2015, then your first annual report will be due before March 31, 2016.) The Hawaii annual report fee is $15. To remain in good standing in Delaware, you must maintain a Registered Agent as well as pay the annual Delaware Franchise Tax.
If you would like assistance with registering your Delaware LLC for Foreign Qualification in Hawaii, or if you have additional questions about how to operate a Delaware LLC in Hawaii, please call 1-800-345-2677, Ext. 6130 or email email@example.com.
Is your company name outdated, or does it no longer reflect the nature of your business? You are allowed to officially change your company name. Often, clients think it will be costly and time-consuming to change a company name, or that a new company must be filed with the new name. This is not true; your company name can be officially changed, quickly and easily. In fact, it is one of the most common filings requested here at Harvard Business Services, Inc.
In some cases, the original name may have been too specific, such as Bob's Deck & Patio LLC, created before Bob began doing more general contracting and home building. In other cases, a company may be re-branding and want the centerpiece to be the new name. Instead of filing a new company, these clients simply call us. We prepare and file a Delaware Certificate of Amendment to the Certificate of Formation (for LLCs) or Certificate of Incorporation (for corporations) with the Delaware Secretary of State’s office. This filing officially changes the name, either immediately or on an effective date, whichever option is selected by the client.
Filing a name amendment, as opposed to filing a new company, will allow you to maintain the history that is connected to your original filing. Assets don’t change hands, liabilities remain the same, all contracts remain in force and all accounting and tax records remain the same. The name changes but everything else remains intact. This saves you the hassle of opening a new bank account, obtaining a new EIN and creating entirely new internal documents. The formation date of the company remains the date of original formation, which is an important consideration for many entrepreneurs.
The first step in the name change process is choosing the name. This can be a tough decision. For assistance in picking out the right name for your company, read this helpful blog post on naming your company in Delaware.
To make sure your company name is available in Delaware, take advantage of Harvard Business Services, Inc.'s free name check service. After the name has been selected and reserved with the Division of Corporations, a Certificate of Amendment will have to be prepared; it must be signed by an authorized officer of the company. Next, the Certificate of Amendment needs to be filed with the state, and the name will officially change as of the date and time the document is filed, or at some specified date known as the "effective date," after the file date. Company names cannot be effective before the filing date of the name amendment. The state of Delaware typically takes three to five business days to return certified copies of the filing documents. Harvard Business Services, Inc. can file your Certificate with the state of Delaware, relieving you of the hassle and paperwork.
Once the amendment is filed, you should make sure everyone-your clients, your bank, et al-- is aware of the new name for the company. The easy way to inform everyone is to make a list: Write down government agencies your company works with, as well as clients, vendors and banks, and inform them of your new name. Notify the post office, UPS, Federal Express and DHL, as well as any other companies your company deals with. Some of the bureaucracies involved may have a form to fill out, and they may ask you to return the form with a copy of the approved Certificate of Amendment. The IRS allows this change to be made rather easily. Simply send a letter to the IRS stating the new name of the company, the old name, EIN (employer ID number) and the signature of a corporate officer.
Finally, go forward and prosper with the new company name that properly reflects the business you have worked so hard to build.
Should you require assistance in filing a Certificate of Amendment, or any type of amendment, feel free to give me a call at 800-345-2677 or send an email to firstname.lastname@example.org.
There are many things to be considered when forming a new Delaware corporation or LLC. You have some major decisions to make before you incorporate, so a little planning can go a long way. The first few things you must decide on, in no specific order, are:
Company Type: Which business entity do you want to form? If you want a corporation, would you like to form a general corporation, an S-corporation, a close corporation, a non-profit corporation or a public benefit corporation? Perhaps the flexible, easy-to-maintain LLC is the best fit for your new business. You’ll have to figure out which business entity you prefer before you file your new company.
Company Name: Whether your company will provide a service, introduce a cell phone app, import/export raw materials, produce and sell goods, hold assets or protect Intellectual Property, your company name can be instrumental in either the complete success or crushing failure of the new business. The name of your business will be tied to the branding and marketing of your company, so think wisely about your company name.
State of Incorporation: You can incorporate in any state; however, Delaware continues to be the most corporate-friendly state in America. Harvard Business Services, Inc. assists clients from all over the world with forming Delaware corporations and Delaware LLCs.
Date of Incorporation: At Harvard Business Services, Inc., we generally file all companies on a same-day basis. For many people, the date of incorporation is of little importance, so the birthday of a company is just the day you place your order; however, other people may want a specific date of incorporation. Sometimes people want a certain date of incorporation, based on the fiscal year, for tax purposes (January 1 and December 31 are very common). Personal anniversaries and birthdays are also very popular determining factors for a company’s date of incorporation. For many of our international clients, both lucky and unlucky numbers often play a role in deciding on the birthday of a company. Whatever date you choose, and whatever your reason may be for choosing a date of incorporation for your new Delaware corporation or Delaware LLC, Harvard Business Services, Inc. can make it happen for you.
If you have any questions about setting up your new Delaware corporation or Delaware LLC, call us today at 1-800-345-2677, Ext. 6133 or email me at email@example.com.