Calculate your Delaware Franchise Tax outstanding

Harvard Business Services, Inc. guarantees your annual Delaware Registered Agent Fee will remain fixed at $50 per company, per year, for the life of your company.

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1. Alongside their tax payments, corporations are also required to pay a $50 filing fee for their annual reports.
2. Not paying the Delaware Franchise Tax and failing to file the Annual Report for two consecutive years will lead to the State of Delaware’s automatic administrative dissolution of the corporation.
3. Basically, a company pays $400 per million dollars of par value, but the way par value gets calculated is a bit complex.
4. The magic happens when our intuitive software and real, human support come together.

For most VC backed startups, the par value will be listed in one or more of the following legal documents. (Make sure you work with experienced attorneys so they don’t mess up important items like par value!) Your lawyer may also have put your par value into your cap table software. The calculator below will help you estimate how much you’ll need to pay.

We provide small businesses with a tax filing and bookkeeping solution. Our all-star team does your monthly bookkeeping for you and sends your financials to trusted tax professionals for a stress free filing experience. Delaware Franchise Tax is based on a Corporation’s total Authorized Shares. When clients are thinking about forming Delaware Corporations, one of the most important decisions to make is how many total Authorized Shares of Stock the Corporation will have along with the Par Value of the Shares.

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It often includes details about the classes of stock the corporation is authorized to issue, including the par value of each class. For VC-backed startups, it will specifically mention the par value of preferred shares. Any changes to these details typically require an amendment to the Certificate of Incorporation. You’ll need to know your corporation’s gross assets and authorized shares.

Roughly, if you’ve raised $500k to $1M in venture funding, you are likely to what is an organizational chart owe between $500 to $1,000. If you’ve raised $10M in VC funding, you are going to owe closer to $4,000. If you’ve received a bill for $75K, it is because Delaware has calculated the tax using the Authorized Shares Method. Don’t freak out; recalculate using the Assumed Par Value Capital Method.

What about the annual report?

They may decide to start with a minimum stock structure which is 1 to 5,000 shares of stock. With this stock structure, the Delaware Corporation will pay a $225 Delaware Franchise Tax each year which includes the annual report fee. This will allow for the lowest annual fees which is sometimes beneficial for bootstrapped start-up companies.

How much do I owe in Delaware franchise taxes?

For C-Corporations, including VC-backed startups that Kruze proudly serves, the Delaware franchise tax and annual report filings are due by March 1st every year. It’s a critical deadline that these corporations must meet to avoid incurring late fees. Alongside their tax payments, corporations are also required to pay a $50 filing fee for their annual reports. This fee is a small but essential part of maintaining compliance with Delaware’s corporate regulations.