Delaware LLC & INC Annual Report Fees and Requirements
When you form a new business in Delaware, you will have to fulfill certain annual requirements like the Delaware annual report. An annual report is a regulatory requirement especially for public companies and may not be mandatory in every state. For instance, Arizona doesn’t require LLC or corporation to file annual reports. The primary objective of the Delaware annual report information is to provide public disclosure of the operating as well as financial activities of a business over the past year. The requirement of an annual report, due date for filing, and filing instructions is what this guide has been created to provide so that your business remains in compliance with the state laws.
Delaware Annual Report
A Delaware annual report is considered to be a comprehensive overview of the achievements and financial statement of a business entity from the previous year. An annual report is also known by different names in different states like Annual Franchise Tax Report in Arkansas, Periodic Report in Colorado, statement of information in California, Two-Year Report in the District of Columbia, Annual Registration in Georgia, and Business Entity Report in Indiana among others. Some states require this report to be filed annually and in some states it is biennial. The important question is whether your company needs to file a Delaware annual report information sheet or do you have to file some other type of report?
What is Delaware annual report?
A Delaware annual report is a type of document that needs to be submitted to the state annually. The reports contain specific business information like:
- The address of a company’s physical location
- The name and address of at least one officer
- The names as well as addresses of all directors
The Delaware annual report information also requires an authorization by an officer or director of the company for filing purposes. Since the annual reports in Delaware state are electronically stored, hence the details of this informational report cannot be viewed publicly thus providing a layer of privacy for businesses.
If you change your business address or officers, what happens? In such a scenario, especially if the change takes place mid-year, an update to Delaware annual report needs to be filed. It is important to note that all forms of annual report amendments will be accepted for a period of one year from the date of the original filing.
Who has to file Delaware annual reports and when is the due date?
Whatever form of business you register with the state of Delaware, the annual requirements may be the same or different. The requirement of Delaware annual report filing is dependent on the form of business. For example, domestic and foreign LLCs are not required to file an annual report and instead have to file an “Alternative Entity Tax”or annual tax with a flat fee. Business entity types like domestic and foreign limited partnerships and general partnerships do not require filing an annual report but are required to file an annual tax of $300. On the contrary, a foreign or domestic corporation will be required to file an annual report pursuant to 2 DE Code § 515 (2014 through 146th Gen Ass). The fee for the Delaware annual report information is different for exempt and non-exempt domestic corporations and foreign corporations.
There is a Delaware annual report due date for different forms of businesses and failure to file within the due date may lead to penalties. Business corporations are required to file their annual report along with franchise tax on March 1st, each year. The due date for foreign corporations is June 30th each year while the due date of a limited liability company’s Delaware annual report filing is June 1st of each year.
Filing a Delaware Annual Report
The Delaware annual report filing by a limited liability company, corporations, and other businesses is required by law although some forms of businesses need to file an annual tax instead of the annual information report. Every domestic and foreign corporation that has been organized under the laws of this state and has obtained the right to transact or carry on business in this state will have to file the annual report along with a franchise tax pursuant to 2 DE Code § 502 (2014 through 146th Gen Ass) and 2 DE Code § 515 (2014 through 146th Gen Ass). The filing should be done prior to the Delaware annual report due date. Some of the important aspects to consider while filing this report include the filing due date, where to file and the applicable fee.
Steps to file the Delaware annual report
The Delaware annual report filing process may look complicated, hence the necessary guidance required towards filing it. It is always beneficial to use a professional company with years of experience in filing Delaware annual reports as it can help you to avoid any potential problems. We are offering this service and we will gladly help you with it. If you are interested in the filing of the Delaware annual report process then the following information will provide the necessary guidance.
Step#1: Go to Delaware Division of Corporation website
The website of the Delaware Division of Corporation provides comprehensive information pertaining to the annual report filing along with the fee and Delaware annual report due date. The annual report can only be filed online using the Delaware Corporations Information System: DCIS-eCorp.
Step#2: Enter business entity file number
In order to file the Delaware annual report online, you will need to provide the 7 digit Business Entity File Number. This file number is issued by the state of Delaware to each new business at the time of incorporation or formation. It is a 7-digit number that is used for identifying your company and also filing the Delaware annual report information with the Division of Corporations. You will be able to locate this number on your Certificate of Incorporation or Certificate of Formation.
Step#3: Enter corporate information
In order to facilitate the Delaware annual report filing, you will be required to enter specific corporate information like:
- Exact legal name of the business entity
- Total number of authorized shares
- Class and par value of the shares
- Principal business address and phone number
- Name and address of an officer
- Names and addresses of all Directors
Step#4: Pay franchise tax and annual report fee
The final step towards filing Delaware annual report information is to submit the report fee and also pay franchise tax. The annual report fee for non-exempt corporations is $50 and that of exempt corporations is $25. The fee for foreign corporations is $125. The franchise tax will differ based on the type of corporation. For example, the franchise tax for a non-exempt non-stock corporation is $175. If your company is a non-exempt stock corporation then the franchise tax will be calculated using the Authorized Shares Method or the Assumed Par Value Capital Method. The minimum tax is $175 for Authorized Shares Method and $400 using the Assumed Par Value Capital Method. The maximum tax using either method is $200,000.
Alternatively, you can take advantage of our entity management software as it helps in tracking the annual requirements of your company and thus ensure Delaware annual report filing on time. We will not only help you to file your annual report but also ensure you are able to submit correct Delaware annual report information.
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Consequences of failing to file annual reports
There is a Delaware annual report due date within which you are required to file the report. The due date is different for different forms of business entities but what happens if you fail to file on the due date? Failure to file the Delaware annual report and franchise taxes by business corporations on or before March 1st can lead to penalty. The penalty is $200 along with an interest of 1.5% per month, which is applied to the unpaid tax balance.
According to 8 DE Code § 510 (2018) if a business corporation neglects to file the Delaware annual report information or franchise taxes for a period of one year then the charter of the said corporation will be void, and the company will be declared inoperative.
The penalty for non-payment or late payment of annual tax by a limited liability company is the same as that of a corporation.
Need Any Assistance in Filing Delaware Company Annual Report?
The Delaware annual report filing with the Delaware Division of Corporations is mandatory for corporations by law. There is a difference in the annual requirement for corporations and a limited liability company as the latter is not required to file an annual report. There may be times when a company is unable to file within the Delaware annual report due date. This is where IncParadise ensures you never miss your due date for filing annual report or franchise taxes and this is made possible by providing the necessary assistance and services related to annual report filing on time.
You can also benefit from our entity management software, which keeps you updated regarding the company’s operations and sends reminders regarding annual requirements.