Delaware Annual Report Filing

Introduction on what is Annual Report and how to file in Delaware.

Updated on
Jan 24, 2024
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Understanding the Delaware Annual Report

A Delaware annual report is a mandatory filing for most businesses, akin to filing taxes with the IRS. Its purpose is to update the state about any crucial changes, such as address alterations, management shifts, or changes in ownership. This report is submitted digitally through the Delaware Secretary of State's Division of Corporations online platform. However, it's important to note that not all entities are obliged to file this report. While both LLCs and corporations must pay an entity tax, only corporations are mandated to file an annual report.

In cases where registered agents need updating, businesses must file a Certificate of Change of Agent Form. Additionally, if amendments to the Certificate of Incorporation or Certificate of Formation are necessary, businesses can file Articles of Amendment with the Division of Corporations.

Delaware Annual Report and Franchise Tax: Corporations vs. LLCs

Delaware has gained recognition for its business-friendly environment, especially for LLCs. These entities benefit from robust liability protections and are not obligated to file an annual report; they simply pay a flat-rate tax of $300.

Conversely, corporations face the requirement of filing an annual report along with a Delaware franchise tax, unless they qualify as exempt domestic corporations, in which case only the annual report is required. The calculation of franchise tax varies and can be determined using methods like the Assumed Par Value Capital Method, based on gross assets, or the Authorized Share Method, based on issued shares. Corporations employing the Assumed Par Value Method incur a minimum franchise tax of $400, while those using the Authorized Share Method pay a minimum tax of $175. Large corporate filers are subject to a flat $250,000 fee, with a maximum tax payment of $200,000, except for designated large corporate filers who pay the flat fee.

Detailed information on calculating your company's payment can be found on the Delaware Division of Corporations' website, including access to a franchise tax calculator.

Where to Submit Your Delaware Annual Report

Delaware annual reports are filed with the Delaware Secretary of State, specifically through the Division of Corporations' online filing portal, known as the Delaware Corporations Information System (DCIS – eCorp). This service operates from 8 a.m. to 11:45 p.m. EST.

It's essential to be aware that annual report filings are public records, accessible to anyone interested in checking the status of your business or reviewing any outstanding taxes.

Filing Deadlines for the Delaware Annual Report

Deadlines for submitting the Delaware annual report are contingent on the type of corporation and whether the business operates within or outside the United States. LLCs, while not required to file an annual report, must pay their annual tax by June 1. Domestic corporations are expected to file by March 1, while foreign corporations must submit by June 30.

During the initial year of operation, businesses may not have operated for a full 12 months before their tax and annual report submissions come due. Furthermore, Delaware's franchise tax, while fully due on March 1, mandates that corporations making over $5,000 must file quarterly estimated taxes, with specific deadlines throughout the year.

Cost of the Delaware Annual Report

Filing fees for the annual report differ based on the business structure and location. The following fee breakdown applies:

  • Domestic corporations: $50 plus franchise taxes
  • Foreign corporations: $125 plus franchise taxes
  • LLCs: A flat annual tax of $300, with no annual reporting requirement

The Division of Corporations offers various payment options, including credit card payments (Visa, MasterCard, American Express, Discover) and checking account transfers. Transactions exceeding $5,000 necessitate electronic payment (ACH Debit).

Information Required for Filing the Delaware Annual Report

Online filing of the annual report entails the submission of specific business details:

  • A 7-digit business entity file number for all company owners, required for portal login.
  • Signatures from authorized individuals (president, secretary, treasurer, director, or incorporator if directors are yet to be elected).
  • Registered agent details, including name, address, and signature.
  • Primary business address information.
  • Names and addresses of all directors.
  • Information regarding issued shares and their value.
  • Any additional data required for calculating the franchise tax.
  • Payment details, such as checking account or credit card information.

Post-Filing Procedure for the Delaware Annual Report

Upon successful submission of the annual report, businesses can consider their filing obligations fulfilled for the year, unless other legal reporting requirements apply (e.g., SEC's 10-k report for corporations and regular tax returns). The processed report becomes a public record, archived in the Secretary of State's office.

In instances where the filing process must be interrupted for any reason, users can utilize the "Save Session and Exit" option to generate a Session ID, facilitating the resumption of the filing process at a later time.

Addressing Missed Filing Deadlines

Occasionally, businesses may overlook filing deadlines, resulting in potential late fees. Delaware imposes late fees and interest on unpaid tax balances as follows:

  • LLCs: $200 late fee for late annual tax, with 1.5% interest per month.
  • Domestic corporations: $200 late fee and 1.5% interest per month.
  • Foreign corporations (out of state): $125 late fee.

Failure to file an annual report altogether jeopardizes the business's good standing. In such cases, additional paperwork and payments are required to reinstate the company's status, including the filing of a Certificate of Revival, which incurs fees ranging from $169 to $200+ based on the business structure.

Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. Seek the counsel of a licensed professional for specific questions related to these topics.

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Frequently Asked Questions

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Do I Need to File an Annual Report for My Foreign LLC in Delaware?
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No, Delaware does not mandate annual reports for LLCs, whether foreign or domestic. However, as mentioned earlier, you must pay the franchise tax annually to remain compliant with state law. If you wish to learn more on Annual Report Filing, you may refer to this page.

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