One of the requirements of maintaining a corporation in Delaware is filing the Annual Franchise Tax Report. While LLCs, Limited Partnerships and General Partnerships are not required to file an Annual Report, they will still have to report and pay Franchise Taxes. The Annual Report is used to confirm and update the company’s information with the Secretary of State, such as the name and address of the registered agent and principal office address. The Franchise Tax is assessed for the privilege of doing business in the State of Delaware.
What is Needed to File a Delaware Annual Report
The filing the Annual Report is done through the Delaware Secretary of State’s website.
The report asks for information such as:
- The entity’s Secretary of State File Number. You can find your File Number by doing a name search.
- Legal name of the entity
- Name and street address (P.O. Boxes are not allowed) of the Registered Agent
- Address of the Principal place of business (No P.O. Boxes)
- Names and titles of all managers, members, directors or officers.
Annual Report & Franchise Tax Cost
The Annual Report for the corporation is $50, plus franchise tax fees. Franchise taxes for corporations are at a minimum $175 and are either calculated by the Authorized Shared Method or Assumed Par Value Capital Method, both of which are calculated from the number of shares the corporation has.
Franchise Taxes for Limited Liability Companies, Limited Partnerships and General Partnerships cost $300.
The State of Delaware has different deadlines depending on the business entity.
Corporations: The Annual Report and Franchise Tax is due March 1st of each year.
LLC/LP/GP: Franchise Taxes are due June 1st of each year.
The Delaware Secretary of State’s office sends a reminder notice approximately 60 days before the due date. Even though a reminder is sent, it’s important to make an additional reminder for yourself should you not receive it.
My business made little or no money. Do I still have to file the Annual Report?
Even if your Corporation or LLC received no income or had no business activity, the Annual Report and/or Franchise Taxes are still required to be filed and paid.
What happens if you don’t file the Annual Report on time?
Corporations: Failure to file the Annual Report and pay the Franchise Tax will result in a penalty of $125.00 plus 1.5% interest per month.
LLC/LP/GP: Failure to pay the Franchise Tax will result in a penalty of $200.00 plus 1.5% interest per month.
If the Annual Report is not filed by the due date, the entity’s status will change to Bad Standing. In order for the entity to regain its status of good standing with the Secretary of State, the tax and penalties must be pain in addition to filing a reinstatement form. By not being in good standing, the owners may be held personally liable should the LLC or corporation be sued. Should the company be delinquent for three years, the Secretary of State will dissolve the entity.
How do you change the Registered Agent?
While the Delaware Annual Report form asks for the name and address of the Registered Agent, the Registered Agent can’t be updated on this form.
To update the Registered Agent’s information for an LLC, fill out the Certificate of Change of Agent Form. There is a filing fee of $50 to make the change.
Delaware Secretary of State Contact Information
The mailing address for the Delaware Annual Report is:
Delaware Department of State – Division of Corporations
PO Box 898
Dover, DE 19903
If you have questions, they can be contacted at (302)-739-3073, option 3.