Every Delaware corporation must file its Delaware annual report and franchise tax by March 1 each year. Miss this deadline, and you’re facing penalties, interest, and too many headaches to count. Continued non-payment can even void your corporate charter entirely, stripping your business of legal standing.
But there’s good news in all of this—these requirements are actually pretty straightforward once you understand them. That’s why we’re breaking down everything you need to know about Delaware’s franchise tax and annual report obligations today, including which entity type owes what, how to calculate your tax using both methods, and how to file without overpaying.
Key Takeaways
- Corporations must file and pay by March 1. The Delaware franchise tax annual report is mandatory for all domestic corporations, with a $200 late fee plus 1.5% monthly interest for missed deadlines.
- Delaware LLCs don’t file an annual report. LLCs, LPs, and GPs pay a flat $300 annual tax by June 1 instead, with no report required.
- Two calculation methods can save you money. Corporations can choose between the Authorized Shares Method (minimum $175) or Assumed Par Value Method (minimum $400), and using the wrong one could cost you thousands.
- Foreign corporations have different rules. A foreign Delaware corporation files by June 30, pays a $125 fee, and cannot submit online.
What Is Delaware’s Franchise Tax?
The Delaware franchise tax isn’t an income tax. It’s a fee you pay for the privilege of being incorporated in Delaware and benefiting from the state’s business-friendly legal framework. Whether your corporation earns millions or nothing at all, you still owe this tax.
This distinction matters for financial planning. Your Delaware franchise tax obligation exists independently of profits, revenue, or whether you conduct any business in the state. A corporation incorporated in Delaware but operating entirely in Texas still owes Delaware franchise tax every year.
The Delaware Department of State administers these taxes through the Division of Corporations. They’ll send an annual franchise tax notification to your registered agent in December, but ultimately it’s your responsibility to file and pay on time.
Delaware Corporation Annual Report Information
Beyond paying franchise tax, Delaware corporations must file an annual report that updates the state on your company’s basic information. This report includes:
- Registered agent name and address: Your designated point of contact in Delaware
- Principal place of business: Your actual business address (cannot be your registered agent’s address unless you’re based in Delaware and serve as your own agent)
- Names and addresses of all directors: Current board composition
- Officer information: Name and address of the signing officer
- Authorized shares and par value: Stock structure details
- Total gross assets and issued shares: Required if using the Assumed Par Value calculation method
The annual report ensures Delaware maintains accurate records of who controls and operates corporations within its jurisdiction. Like the franchise tax, filing this report isn’t just regulatory housekeeping. Instead, it’s a legal requirement that affects your ability to obtain certificates of good standing.
Who Must File and Pay Taxes in Delaware?
Delaware’s franchise tax requirements vary significantly by entity type. Here’s what each business structure owes:
Domestic For-Profit Corporations
- Annual report: Required
- Franchise tax: $175 minimum to $200,000 maximum (calculation-dependent)
- Annual report filing fee: $50
- Deadline: March 1
Domestic Nonprofit Corporations
- Annual report: Required
- Franchise tax: Exempt
- Annual report fee: $25
- Deadline: March 1
Foreign Delaware Corporation
- Annual report: Required
- Franchise tax: $125 flat fee
- Deadline: June 30
- Note: Cannot file annual report online—must mail or fax
Delaware LLCs, LPs, and General Partnerships
- Annual report: Not required
- Annual tax: $300 flat fee
- Deadline: June 1
Series LLCs
- Base tax: $300 for parent LLC
- Additional: $75 per registered series
- Deadline: June 1
One common point of confusion: Delaware LLCs don’t file an annual report at all. They simply pay the $300 annual tax. Corporations, by contrast, must both file the report and pay the franchise tax.
Not sure how to file your Delaware annual report?
Get a free consultation with our team of experts and learn how Mosey can manage critical deadlines and filings for you.
How to Calculate Delaware Corporation Franchise Tax Fees
Delaware offers two methods for calculating franchise tax. You can use whichever results in the lower amount, and choosing correctly can save thousands of dollars.
Authorized Shares Method
This is Delaware’s default calculation, based solely on how many shares your corporation is authorized to issue (not how many you’ve actually issued).
Current rates:
- 1–5,000 shares: $175
- 5,001–10,000 shares: $250
- Each additional 10,000 shares (or portion): Add $85
- Maximum: $200,000
Example: A corporation authorized for 100,000 shares pays:
- $250 (first 10,000 shares)
- $85 × 9 = $765 (remaining 90,000 shares in 10,000-share increments)
- Total: $1,015
This method works well for corporations with few authorized shares. But startups often authorize millions of shares for flexibility with investors and employee equity, which can result in enormous tax bills under this method.
Assumed Par Value Capital Method
This alternative calculation considers your total gross assets and issued shares, often resulting in significantly lower taxes for companies with high share counts but modest assets.
How it works:
- Divide total gross assets by total issued shares = Assumed Par Value
- Multiply assumed par value by authorized shares = Assumed Par Value Capital
- Tax rate: $400 per $1 million (or portion) of assumed par value capital
- Minimum: $400 | Maximum: $200,000
Example: A corporation with 10 million authorized shares, 1 million issued shares, and $500,000 in gross assets:
- $500,000 ÷ 1,000,000 issued shares = $0.50 assumed par value
- $0.50 × 10,000,000 authorized shares = $5,000,000 assumed par value capital
- $5 million rounds to $5 million ÷ $1 million = 5
- 5 × $400 = $2,000 franchise tax
Compare that to the Authorized Shares Method for the same company: with 10 million authorized shares, you’d owe roughly $85,000. Same company, dramatically different tax bills.
Important: To use the Assumed Par Value Method, you must report total gross assets and issued shares on your annual franchise tax report. Gross assets should match “total assets” from your U.S. Form 1120, Schedule L.
Large Corporate Filer Status
Corporations with stock listed on a national securities exchange and meeting specific thresholds pay a flat $250,000 annually. These thresholds require consolidated annual gross revenues or assets of at least $750 million, plus minimum revenues and assets of $250 million each.
How to File Your Delaware Annual Report Online
Delaware mandates electronic filing for domestic corporations. Here’s the step-by-step process:
Step 1: Access the filing portal Go to the Delaware Division of Corporations website (corp.delaware.gov) and click “Pay Taxes / File Annual Report.”
Step 2: Enter your file number You’ll need your seven-digit Business Entity File Number. If you don’t know it, search Delaware’s business entity database using your company name.
Step 3: Complete the annual report Enter or verify your corporation’s information:
- Federal Employer Identification Number (EIN)
- Principal business address
- Names and addresses of all directors
- Names and addresses of officers
- Signing officer’s name, title, and address
Step 4: Calculate your franchise tax The system defaults to the Authorized Shares Method. If you want to use the Assumed Par Value Method, enter your total gross assets and issued shares—the system will calculate both and show you the new amount.
Step 5: Submit payment Pay using electronic payment (ACH) or credit card. Electronic payment is required for transactions over $5,000.
Once payment processes, you’ll receive confirmation. The filing typically processes within 3–5 business days, though franchise tax payments post immediately.
Quarterly Estimated Payments
Corporations owing $5,000 or more must pay estimated taxes quarterly:
- 40% due June 1
- 20% due September 1
- 20% due December 1
- Remaining balance due March 1
Missing quarterly payments triggers the same penalty and interest structure as missing the annual deadline.
Avoid late fees and penalties.
Mosey automates your Delaware annual report and franchise taxes for the March 1 deadline.
Late Fees and Penalties: What Happens If You Don’t File
As you probably guessed, Delaware takes franchise tax compliance seriously. Here’s what happens when you miss deadlines:
Immediate penalties:
- $200 late fee for missing the March 1 deadline
- 1.5% monthly interest on unpaid tax and penalties
Administrative consequences:
- No certificate of good standing issued while taxes are owed
- State won’t process other corporate filings until you’re current
- Charter voided if you fail to pay for one year
That last point deserves emphasis. A voided charter means your corporation legally ceases to exist in Delaware. You lose liability protection, can’t enter contracts, and must go through reinstatement proceedings to restore your company—paying all back taxes, penalties, and reinstatement fees in the process.
For Delaware LLCs that miss the June 1 deadline, consequences include loss of good standing, potential injunction from doing business, and certificate of formation cancellation if unpaid for three years.
Important Consumer Alert: Avoiding Scams
The Division of Corporations explicitly warns about deceptive solicitations. Businesses receive legitimate-looking mailings demanding payment for “annual report services” or “corporate compliance fees” that aren’t actually from the state.
Red flags to watch for:
- Mail that doesn’t come directly from the State of Delaware or your registered agent
- Payment demands to unfamiliar addresses or entities
- Urgency tactics with inflated fees
- Requests for payment methods the state doesn’t use
Your official franchise tax notification comes through your Delaware registered agent in December. When in doubt, contact the Division of Corporations directly at 302-739-3073 or verify through the official website.
Renewal Service Options and Registered Agent Support
Many businesses use their registered agent or a compliance service to handle Delaware franchise tax filings. This renewal service approach offers several benefits:
- Deadline tracking — Automated reminders before due dates
- Filing assistance — Help calculating taxes using both methods
- Document handling — Receiving and forwarding official notices
- Compliance monitoring — Ensuring you don’t miss related requirements
Your registered agent plays a crucial role in this process since the Delaware Department sends franchise tax notifications directly to them. A responsive agent forwards these notices promptly, giving you time to prepare payment.
For companies operating in multiple states, Delaware is just one deadline among many. A missed franchise tax filing might seem minor in isolation, but combined with obligations in 10 or 20 other states, the administrative burden compounds quickly.
Multi-State Compliance: Delaware in Context
Delaware’s business-friendly reputation makes it a popular incorporation choice—over 60% of Fortune 500 companies call it their legal home. But incorporating in Delaware while operating elsewhere creates a dual compliance burden.
You’ll owe Delaware its annual franchise tax regardless of where you actually do business. And you’ll likely owe foreign qualification requirements, payroll taxes, and other obligations in every state where you have employees or conduct significant business activity.
This multi-state complexity is where manual tracking breaks down. Spreadsheets work for one or two states, but juggling Delaware’s March 1 deadline alongside California’s Statement of Information, Texas franchise tax, and 15 other state requirements quickly becomes unmanageable.
Compliance automation platforms exist specifically because of this challenge—consolidating deadlines, tracking requirements, and ensuring nothing slips through the cracks as your company grows across state lines.
Simplify Delaware Compliance with Mosey
Delaware’s franchise tax and annual report requirements aren’t complicated individually. But they’re one piece of a much larger compliance puzzle, especially for growing companies with employees and operations spanning multiple states.
Missing a single deadline creates penalties. Missing multiple deadlines across multiple states can create a chain reaction of fees, paperwork, legal issues, and more. And the administrative burden of tracking it all manually only grows as your company expands.
That’s where Mosey helps. Our platform automates the tracking and filing requirements that drain HR and finance bandwidth, from Delaware franchise tax deadlines to state registrations, payroll tax accounts, and employee handbook updates. Instead of maintaining spreadsheets and hoping nothing falls through, you get a centralized dashboard showing exactly what’s due, when, and where.
Ready to take Delaware compliance off your plate? Schedule a demo with Mosey to see how we automate this requirement each year and simplify multi-state compliance for growing businesses.
FAQ: Delaware Franchise Tax and Annual Report
How do I calculate Delaware franchise tax for my corporation?
Delaware offers two calculation methods: the Authorized Shares Method and the Assumed Par Value Capital Method. The Authorized Shares Method bases tax on your total authorized shares, with rates starting at $175 for up to 5,000 shares. The Assumed Par Value Method uses total gross assets and issued shares, with a $400 minimum. You can use whichever method results in the lower tax—and for companies with many authorized shares but modest assets, the Assumed Par Value Method often saves thousands.
What happens if I miss the Delaware franchise tax deadline?
Missing the March 1 deadline triggers an immediate $200 penalty plus 1.5% monthly interest on any unpaid balance. Delaware also won’t issue certificates of good standing while you owe taxes, which can block other business transactions. If you fail to pay for an entire year, Delaware will void your corporate charter, effectively dissolving your company until you complete reinstatement proceedings and pay all back taxes.
Do Delaware LLCs have to file an annual report?
No, Delaware LLCs are not required to file an annual report. However, they must pay an annual tax of $300 by June 1 each year. This also applies to limited partnerships and general partnerships formed in Delaware. The penalty for late payment is $200 plus 1.5% monthly interest, and extended non-payment can result in loss of good standing and eventual certificate cancellation.
Can I file the Delaware annual franchise tax report by mail?
Domestic Delaware corporations cannot file by mail—electronic filing is mandatory. You must submit your annual report online through the Delaware Division of Corporations website at corp.delaware.gov. However, foreign corporations (those incorporated elsewhere but registered in Delaware) cannot file online and must mail or fax their annual report with the $125 filing fee by June 30.
What’s the difference between Delaware franchise tax and income tax?
Delaware franchise tax is a fee for the privilege of incorporating in Delaware—you owe it regardless of whether your company earns any income or conducts any business in the state. Income tax, by contrast, applies only to corporations actually doing business within Delaware and is based on earnings. Many Delaware-incorporated companies owe franchise tax but not income tax because they operate entirely in other states.
