Understanding Delaware annual report requirements

The Delaware Annual Report updates the state about your company's status, keeping you compliant and protected under Delaware law.

The Delaware Division of Corporations requires an annual filing from:

• Domestic corporations
• Foreign corporations qualified to do business in Delaware
• Limited Liability Partnerships (LLPs) and Limited Liability Limited Partnerships (LLLPs)

Alternative entities such as LLCs, LPs, and GPs do not file annual reports, but they must pay a $300 annual tax each year.

Each business type faces different requirements and deadlines, so staying organized is key.

The fundamentals of the Delaware annual report

Understanding the basics of the Delaware Annual Report is crucial for any business registered in the state. Let's break down the key concepts to give you a clear picture of what this report entails and why it matters.

What is the Delaware annual report?

Think of the Delaware Annual Report as your yearly check-in with the state. Unlike financial reports that detail your profits and losses, this document simply confirms your business still exists and updates any changes to your company structure.

Why should you care about filing the Delaware Annual Report properly?

1. It keeps your business in good standing with the state
2. It allows you to continue operating legally in Delaware
3. It maintains your company's right to sue in Delaware courts
4. It preserves your company's legal protections

By submitting this report, you're essentially telling Delaware, "Yes, we're still operating, and here's what's changed since our last filing."

Who needs to file a Delaware annual report?

These businesses must file a Delaware Annual Report:

• Domestic corporations: annual report + franchise tax due March 1
• Foreign corporations: annual report due June 30 (no Delaware franchise tax)
• Limited Liability Partnerships (LLPs) and Limited Liability Limited Partnerships (LLLPs): annual report due June 1

The following entities do not file annual reports, but must pay an annual tax of $300 due June 1:

• Limited Liability Companies (LLCs)
• Limited Partnerships (LPs)
• General Partnerships (GPs)

Exempt domestic corporations follow different rules, paying a $25 annual report fee with no franchise tax.

Keeping track of which filings apply to your specific business type can quickly become overwhelming, especially if you manage multiple entities across different states.

Delaware annual report: Key filing deadlines and fees

Here's what you need to know about when to file and how much it'll cost you.

Delaware annual report deadlines

Pay close attention to the following timelines: 

• For domestic Delaware corporations, your annual report and franchise tax are due by March 1 each year.
• For foreign corporations qualified in Delaware, your Delaware annual report is due by June 30, and you pay a $125 annual report filing fee (no Delaware franchise tax).
• For LLCs, LPs, and GPs, the $300 annual tax is due by June 1 each year.
• For LLPs and LLLPs, the annual report is due by June 1.

Be aware that Delaware doesn't offer extensions for these filings. Miss the deadline, and you'll face:

• Late fees
• Loss of good standing
• Voided charter status (for corporations) or forfeiture

The consequences of missing deadlines can be severe, potentially disrupting your ability to conduct business.

Understanding Delaware annual report fees and franchise tax

Delaware charges two types of costs: a filing fee and Delaware’s franchise tax. The filing fee is a straightforward $50 flat rate for the Delaware Annual Report.

The franchise tax calculation is considerably more complex and can be determined in two ways:

1. Authorized Shares Method:
   
   • 5,000 shares or less: $175
   • 5,001 to 10,000 shares: $250
   • 10,001 shares and above: $250 + $85 for each additional 10,000 shares
2. Assumed Par Value Capital Method: Under this method, Delaware calculates tax by:
   
   • Dividing gross assets by total issued shares to get an "assumed par" value per share
   • Using that assumed par value to compute assumed par value capital based on authorized shares
   • Applying a rate of $400 per $1,000,000 (or fraction) of assumed par value capital, with a minimum tax of $400

Delaware law sets a minimum franchise tax of $175 and a maximum of $200,000.

Additionally, Delaware allows corporations to make quarterly franchise tax payments to manage the tax burden throughout the year.

Step-by-step guide to filing your Delaware annual report

Filing your Delaware Annual Report doesn't have to be a bureaucratic nightmare. This guide breaks down the process into manageable steps so you can complete it accurately and efficiently.

Preparation

Before you start filing, gather these essential items:

1. Company Information:
   
   • Legal business name
   • Delaware business entity file number
   • Principal place of business address
   • Names and addresses of directors/officers (for corporations) or members/managers (for LLCs)
2. Financial Information:
   
   • Number of authorized shares (for corporations)
   • Gross assets of the company
3. Account Credentials:
   
   • Login information for the Delaware Division of Corporations website
4. Payment Method:
   
   • Credit card or ACH information for fee payment

Having everything ready beforehand makes the filing process much smoother.

Filing procedure

Ready to file? Here's how to submit your Delaware Annual Report through the Delaware Division of Corporations portal:

1. Go to the Delaware Division of Corporations online portal.
2. Enter your Business Entity File Number (found on Certificate of Formation or Certificate of Incorporation).
3. Click "File Annual Report" next to the current tax year.
4. Review and update your company information:
   
   • Verify the company name
   • Update director/officer or member/manager information
   • Confirm or adjust the number of authorized shares (for corporations)
5. Calculate your franchise tax (if applicable):
   
   • Choose either the authorized shares method or the assumed par value capital method
   • Follow the system's calculation process
   • Add any overdue tax, penalties, or interest
6. Double-check all information for accuracy.
7. Enter your payment details.
8. Submit your filing and payment.
9. Save and print the confirmation page for your records.

If you run into technical problems during manual filing, use the live chat to reach the Delaware Division of Corporations support team for help resolving website errors or payment issues.

Delaware annual report payments

Delaware offers three ways to pay your Delaware Annual Report fees:

• Credit Cards: Visa, MasterCard, and American Express work for online filings.
• ACH (Automated Clearing House): Direct transfers from your bank account.
• Checks: Accepted for mail-in filings, but not for online submissions.

Watch out for processing fees on credit card payments—they typically add about 2.5% to your total. ACH transfers usually come without extra fees, making them the smarter choice for larger payments. Also note that Delaware caps credit card transactions at $10,000. If you owe more, you'll need to make multiple payments or choose another method.

Managing Delaware annual report compliance and avoiding penalties

When you miss filing your Delaware Annual Report on time, the penalties hit hard and fast:

1. Monetary Penalties: Late filings trigger a $200 penalty plus interest on unpaid taxes.
2. Loss of Good Standing: Without good standing, you'll struggle to conduct business, secure loans, or participate in legal proceedings.
3. Administrative Dissolution: Miss three years of filings, and Delaware may dissolve your business entity completely.
4. Business Disruptions: Lost good standing can block you from getting necessary licenses, permits, or contracts.

If you've fallen out of compliance, take these steps immediately:

1. File all overdue annual reports
2. Pay outstanding fees, taxes, and penalties
3. Submit a Certificate of Renewal and Revival (corporations) or Certificate of Revival (LLCs)

Advanced strategies for streamlined Delaware annual report compliance

As your business grows, your compliance needs become more complex. Smart strategies and the right tools can transform how you handle Delaware Annual Reports and overall compliance management.

Utilizing compliance software

Automated compliance software delivers major advantages for managing Delaware filings:

• Centralized Data Management: One secure location for all entity information
• Automated Reminders: Alerts that prevent missed deadlines and pre-filled forms
• Real-time Updates: Immediate information about changing regulations

• Multi-jurisdiction support: No more guesswork or missed filings
• Direct integration: Easily filing via state filing systems
• Customizable reporting: Keeps track of all of your foreign entities

These tools can provide substantial time and cost savings for multi-entity filings.

Simplify multi-state compliance with Discern

With Discern's platform, you can manage all your compliance needs from a single dashboard, track deadlines automatically, and file reports in minutes instead of hours. 

Our system handles multi-state compliance simultaneously, pre-fills forms with your entity information, and ensures you never miss a critical deadline again, including for multi-state franchise tax.

Ready to automate your Delaware compliance? Book a demo to see how Discern simplifies franchise tax filing and multi-state compliance management.