If you are starting a new business venture, it is essential to be aware of your state’s annual report filing requirements. This is especially true if the state in question is Delaware – one of the top choices for incorporations.
Delaware requires corporations formed there to file annual reports and pay franchise taxes by March 1 for domestic corporations, and June 30th for foreign entities.
How to File
No matter if you’re an LLC, corporation, or nonprofit organization, filing your annual report in Delaware is essential. Staying organized and compliant can help avoid expensive fines, penalties and other negative outcomes.
Delaware requires corporations to file an annual report and franchise tax annually in March. You may choose to do this online yourself or with assistance from an accountant or registered agent.
To complete this process, you will need your 7-digit Business Entity File Number, which can be found on your certificate of incorporation or formation.
Corporations who fail to file their annual reports by the due date owe a penalty of $200 plus 1.5% interest per month. Furthermore, corporations must pay the franchise tax fee for the previous year in arrears; domestic corporations pay this using either the Authorized Shares Method or Assumed Par Value Capital Method, depending on their size.
Requirements
If your business entity is incorporated in Delaware, then filing a Delaware annual report is mandatory by law. These reports contain details about your company and its operations.
Filing annual reports in Delaware can be a time-consuming task, but it’s essential for keeping your business compliant with state laws. If you are uncertain how to complete and submit this necessary report, consult an experienced attorney for guidance.
Every year, corporations must file their annual report with the Delaware Secretary of State by March 1st and pay a franchise tax based on the number of authorized shares.
Fees
Annual reports are a requirement in nearly all states to provide state agencies with accurate information on registered entities within that jurisdiction. Failure to file them on time can result in late fees and other penalties that hinder your business’ ability to operate smoothly.
Corporations in Delaware must file their reports by March 1. Additionally, they are required to pay a franchise tax as well.
The franchise tax is determined based on the number of shares authorized, issued, and total assets. There are two methods for calculating this: Authorized Shares Method and Assumed Par Value Capital Method.
Domestic corporations and foreign corporations must file a report by March 1 of each year, except nonprofit corporations which are exempt from payment of the tax.
Filing a Delaware annual report requires $50 for domestic corporations and $25 for nonprofits. You can pay the fee online at the Delaware Division of Corporations website by clicking “Pay Taxes/File Annual Report,” entering your Business Entity File Number, making payment with either electronic check (ACH Debit) or major credit card.
Timeline
Filing a Delaware annual report depends on the type of business you own. Domestic corporations must file their reports and pay franchise tax by March 1 each year, while foreign corporations must submit on or before June 30.
Once your annual report is filed, it is wise to pay the fees associated with Delaware franchise tax and filing by March 1. For Delaware domestic corporations, there is a minimum franchise tax of $175 and filing fee of $50.
In addition to these fees, there is also a penalty if you fail to file your Delaware annual report by the deadline. This penalty amounts to $200 and the state will charge interest at 1.5 percent per month.
For many businesses, the time and resources necessary to manage their annual reports can be overwhelming. That is why many opt for a managed service like Harbor Compliance: an affordable yet easy solution that guarantees your company meets Delaware’s filing requirements every year.
