Minimize Your Delaware Franchise Tax Filing

C-Corps and LLCs both need to file, but the requirements are different.

Any C-Corp incorporated in the State of Delaware, regardless of ownership, must file every year on March 1st, or receive an automatic $200 penalty. Delaware assesses an annual franchise tax for the privilege of doing business in the state. This return or “Annual Report” must be filed by March 1st with the state of Delaware each year, regardless of income or activity, as long as the business is registered in the state. 

Unlike corporations, Delaware LLCs are not required to file an Annual Report. However, they are obligated to pay an Annual Franchise Tax of $300, a flat rate applicable to all LLCs formed in Delaware. This tax is mandatory regardless of the LLC’s income or level of business activity. This is due on June 1st.

The Delaware Franchise Tax must be filed every year on or before March 1st

We recommend purchasing the Delaware Franchise Tax package before 02/27 to ensure compliance with the March 1 deadline. Purchases made after this date may not meet the deadline.

If we don’t receive your information by February 27th, we will not be able to meet the deadline.

Yes, filing after March will have an automatic penalty of $200 for late filing plus interest.

Yes, even if your company had no activity you will still need to file the Franchise tax in Delaware. This is basically a tax for having a corporation in Delaware.

There are two ways to calculate the Delaware franchise tax – one based on the number of shares issued by the company and one based on the assets of the company. This can be confusing for people and lead to a shockingly high bill (6 figures in some cases). Many of our clients prefer for us to prepare their Delaware franchise tax so they avoid the mild heart attack that can come from a miscalculation. 

This will be business-dependent. If you have a lot of issued shares and not many assets then the share method will likely be more expensive. If you have lots of assets but haven’t issued many shares then the asset method may be more expensive. This is why we calculate it both ways, to make sure you get the best deal.  

We make purchasing your Annual Report easy. After you pay for our services, a link will be sent to complete our simple questionnaire. When we receive it, we assign one of our experienced Delaware Franchise Tax prep specialists, who may ask for additional information. Once the form is prepared, you will receive a link to the Delaware website to pay the filing fee and tax due with your credit card or bank account.  Then print and save a copy of the receipt.  

It’s best to save a copy of the receipt in your records. If you were ever audited, the IRS does not accept credit card statements as proof of payment so you need actual receipts. Plus, if Delaware ever asked then you would want to have the statement on hand. 

To calculate your Delaware Franchise Tax Due, you can use Cleer’s Delaware Franchise Calculator.

The $50 Fee in the Delaware Franchise Tax is the mandatory Annual Filing Fee.

This usually needs a recalculation, which we can do for you once we start filing the draft of your Delaware Franchise Tax.

Please note that DE is no longer allowing clients to use the address of your Delaware registered agent, unless the corporation acts as its own registered agent.

Many company owners find the calculations on the Delaware forms confusing, as it involves number of shares issued and held by the company. Cleer makes it simple and can advise companies on the best way to set up your shares and avoid unnecessary penalties. We prepare this report for you, making sure you stay compliant with the State. However, the Franchise tax owed and Delaware Annual Report filing fee are not included, and are paid directly on the State’s website.

We can prepare your Delaware Franchise Tax for your C-Corp for only $199.

The $199 payment is for filing prep only. Delaware taxes owed and the filing fee paid upon submission are not included as part of this package. Just so you know what to expect, the average DE Franchise Tax for most Corporations typically runs around $225 – $450, depending on the share structure of your company.