Delaware LLC Annual Report: Everything You Need to Know
Delaware LLC annual reports and franchise taxes are due every year, and both have specific requirements that must be met. 3 min read
2. Filing for a Corporation That Was Formed Out of State
3. What Must Be Included in Your Delaware Annual Report
4. Delaware Franchise Tax
5. Where to File Your Delaware Franchise Tax Report for Your Delaware Corporation
6. Calculating Your Delaware Franchise Tax
7. LLCs, LPs, and LLPs in Delaware
Delaware LLC annual reports and franchise taxes are due every year, and both have specific requirements that must be met. These requirements include paying fees and providing updated information regarding your LLC.
In Delaware, domestic corporations have both an annual report and a franchise tax. These are due on March 1 of each year. You must file the Delaware corporate annual report online. Corporations are required to pay an annual report fee in the amount of $50, along with an annual franchise tax.
Filing Your Delaware Annual Report and Franchise Tax
While you do have the option of paying a Delaware registered agent to complete the work for you, you may be wasting your money since you can easily complete the task by entering your information into the Delaware Division of Corporations website.
The total cost of filing all necessary items – the Delaware franchise tax and annual report for Delaware domestic corporations – is at minimum, $225 per year. This cost is calculated using a minimum tax of $175 plus the minimum filing fee of $50.
Filing for a Corporation That Was Formed Out of State
If your corporation was formed outside of the state of Delaware but registered to do business in Delaware, then you must pay a $125 fee for registration. This is considered a foreign corporation. Even if you are located outside of the United States, you are not considered a foreign corporation for these purposes if your corporation was in fact formed in Delaware. If you do have a foreign corporation, however, it is important to note that foreign corporations cannot file online. Foreign corporations have an annual fee, which must be paid online by June 30 of each year.
What Must Be Included in Your Delaware Annual Report
There are specific requirements for the Delaware Annual Report. When filing your Delaware Annual Report, you must include the following information:
- The address and name of at least one officer
- The address and name of each and every Director
- The company's physical address location
- An authorization completed by any officer to file the Annual Report
The annual report will then be filed with the Delaware Secretary of State's Office. The annual report will also be added to the company's filing history.
Delaware Franchise Tax
The annual corporate franchise tax minimum payment is $175. This minimum franchise tax payment is determined by calculating the number of authorized shares. Since corporations with a high number of authorized shares may be required to pay a large sum of money, up to $200,000, it is recommended that you keep your number of authorized shares under 5,000 if that makes sense for your corporation.
There is a state penalty of $125 if a domestic corporation has not filed the annual report and franchise tax. In addition, the state also will charge a 1.5 percent interest rate on the funds that are due.
Where to File Your Delaware Franchise Tax Report for Your Delaware Corporation
You may file your Delaware Franchise Tax Report at the Delaware state website. If you elect to mail your franchise tax report, you may mail it to the following address:
Delaware Division of Corporations
Attention Franchise Tax
410 Federal Street, STE 4
Dover, DE 19901
Calculating Your Delaware Franchise Tax
You can calculate your Delaware Corporation Franchise Tax through either of these two methods – the Authorized Shares Method or the Assumed Par Value Method. For the Authorized Shares Method, the tax is calculated based on the total number of shares that were authorized, not necessarily the number of shares that were actually issued to the shareholders. The Assumed Par Value Method for calculating taxes is based on the issued shares, along with the corporation's total gross assets and authorized shares.
Using each method, the lowest tax you can be obligated to pay using the Authorized Shares Method is $175, while the lowest tax using the Assumed Par Value Method is $350.
LLCs, LPs, and LLPs in Delaware
The procedure for Delaware-registered Limited Liability Companies (LLCs), both domestic and foreign, is simpler than the procedure for corporations. For LLCs in Delaware, you must simply pay a $300 tax annually.
There is no requirement in Delaware that LLCs have to file an annual report, rather, they are only responsible for the annual tax. For other entities such as LPs, LLPs, and other forms of limited partnerships, for each partner, the fee increases by $300.
If you need help with your Delaware LLC Annual Report, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.