Delaware LLC Annual Fee: Everything You Need to Know
When assessing a Delaware LLC annual fee, you need to know that it costs $300 to maintain your LLC. 3 min read
2. Incorporation Fee Breakdown
3. LLC Franchise Tax
4. Delaware LLC Drawback
5. Corporate Tax Structure
6. LLC Annual Reports
Delaware LLC Annual Fee
When assessing a Delaware LLC annual fee, you need to know that it costs $300 to maintain your LLC. The tax is usually due on June 1. Such a fee stems from the state’s Annual Franchise tax, which is the right or privilege to conduct business in the state. In addition, doing business in Delaware comes with a number of added fees. For instance, you must pay $89 to incorporate in Delaware, and this fee is broken down in the following ways:
- $50 Filing Fee
- $15 Minimum Filing Fee Tax
- $24 County Fee
With that, Delaware LLCs do not have to file annual reports in the same way as corporations do. Further, Delaware offers a host of favorable tax and business laws that other states cannot compete with. Whether you want to incorporate or choose the LLC route, remember that fees and maintenance requirements depend on the structure you choose.
Incorporation Fee Breakdown
Regarding corporations, for instance, prices are based on a corporation with 1,500 shares from a no-par value, which means the Delaware incorporation fees will vary on the amount of shares you wish to purchase based on the par value.
LLC Franchise Tax
Officials recommend that you pay the franchise tax early to avoid any late penalties. For instance, if you do not pay the taxes by June 1, you could be subject to a late fee of $200 and pay an additional 1.5 percent interest for each month it goes unpaid. Delaware has a zero-tolerance policy on late payments, and the penalties will be added to the franchise tax balance. Many owners pay the tax in April because they will be paying other taxes that same month.
Delaware LLC Drawback
One of the few drawbacks of establishing a Delaware LLC is that the state raises fees to make up for budget gaps, and many Delaware LLCs are taking big hits currently due to rising costs. With that, it is easier to file in Delaware than most states. If you don’t operate in Delaware, you do not have to submit income tax or accounting reports to authorities, and your LLC is not liable for state income taxes.
Corporate Tax Structure
With that, a Delaware incorporation comes with a different set of standards. For instance, corporations must submit annual reports in addition to paying franchise taxes. The fee for filing annual reports is $50, including any applicable taxes. Corporate tax filings are due on March 1 annually.
Minimum corporate taxes in Delaware amount to $175 for corporations on the Authorized Shares plan, and there is a minimum tax of $350 on corporations on the Assumed Par Value Capital plan. Regardless, all corporate taxes are capped at $180,000.
The fee structure for corporations is broken down as follows:
- Tax payers that owe $5,000 or more will pay taxes in a quarterly fashion, with 40 percent due on June 1
- 20 percent would be due by September 1
- 20 percent would be due by December 1
- The remaining is due on March 1
LLC Annual Reports
To file an annual report, you must go online to the Delaware Divisions of Corporations website. From there, you should enter your LLC file number, submit your information. Review all taxes that are due, and pay the fee obligations accordingly. Choose “Pay Full Amount,” and leave the box on the right blank. Select from the “Payment Type” from the drop-down menu, including if you’ll pay with a credit card or checking account.
Enter the following information:
- Billing Information
When finished, hit the “Submit” button.
Keep in mind that you’ll need a Business Entity File Number (File Number) to make your payment online. You can find your number going to the state database. You may call the Franchise Tax Division via phone: 302-739-3073, or you may email the department: DOSDOC_Ftax@state.de.us.
From there, you will receive an email confirmation affirming you made the payment. Print this email for record-keeping purposes. Moreover, you should remind yourself regularly of the necessary taxes due each year. Also, the state will send reminders to your LLCs registered agent. A registered is the appointed representative who receives your document on behalf of your LLC and sends the documents to your business.
Officials will send notices are sent in February of each year via mail.
To find out more about a Delaware LLC annual fee for your business, submit your legal inquiry to our UpCounsel marketplace. UpCounsel has some of the most experienced and prestigious lawyers in the county that will help you all matters pertaining to LLC Delaware creation. Further, they will help you maintain your LLC in Delaware, regardless of where you live in the country.