Delaware Franchise Tax FAQ
Harvard Business Services is not my Registered Agent. Can I still pay my Delaware Franchise Tax on your web site?
Yes, HBS can assist with the filing of the franchise tax for any Delaware company you may have, whether HBS is the registered agent or not. (Note: Max stock past due companies and Non-HBS Max stock companies cannot pay on our website, but we can certainly help via telephone/email/fax)
I notice your annual agent fee is only $50 per year. When I pay my Franchise Tax through HBS can you change my Registered Agent to you?
Not a problem, we can gladly file a change of agent to HBS for you, as well as assist with the filing of the annual franchise tax. The company must be current with Delaware's annual franchise tax before the filing can be processed. To change from your current registered agent to Harvard Business Services, click HERE.
What happens if I’m late paying my Franchise Tax?
The State of Delaware requires that franchise tax be paid by the respective due dates each and every year. If franchise tax is not paid by the deadline, then the State of Delaware will impose a late penalty plus interest, and the company will not be in a good standing status. For an INC, the late penalty is $125 and for an LLC, the late penalty is $200. The rate of interest is 1.5% per month.
What if I forgot to pay last year?
If the franchise tax is not paid on time, then the State of Delaware will assess a late penalty with interest and the company will not be in a good standing status. When you are ready to restore the company back into good standing, HBS will calculate the correct total amount due so you can make payment arrangements for the past due fees.
What will happen if I form a company and never pay my Franchise Tax?
The franchise tax must be paid each and every year regardless if the company had any profit/loss, conducted any business activity, whether a bank account or business license was obtained or not, etc. If the franchise tax is not paid, then the State of Delaware will impose late penalties plus interest.
For a Corporation, if the franchise tax fees are not paid and/or the annual report is not filed after one year, then the company will be in a delinquent status. If the franchise tax fees are not paid and/or the annual reports are not filed for two years in a row, then the company will be voided and no longer be in good standing.
For a Limited Liability Company, if the franchise tax fees are not paid after one year, then the company will cease to be in good standing. If the franchise tax fees are not paid for three years in a row, then the company will be voided.
Will the State of Delaware turn me into a collection agency if I never pay my Franchise Tax?
Outstanding franchise tax fees are generally not handed to a collection agency by the State of Delaware. The consequence for not paying the franchise tax is that the company is not in good standing and additional late penalties and interest are imposed.
Do I pay Franchise Tax to my home State also, or just to Delaware?
Typically, most states charge an annual franchise tax and/or report fee due each year. You would need to contact the proper tax authorities in your home state to determine any amounts due and the deadlines.
Can I pay my Delaware Franchise Tax with my credit card?
Yes, HBS gladly accepts American Express, Visa, MasterCard and Discover for making payment arrangements for franchise tax fees under $750. If the amount you owe is higher than $750, then you can still pay with a credit card; however, there is an additional 3% bank-processing fee. Otherwise, you may make payment arrangements via company check, money order, certified check, bank wire transfer or PayPal.
When should I pay my Franchise Tax?
For an Corporation franchise tax is due by March 1 of every year. For a Limited Liability Company franchise tax is due by June 1 of every year.
What’s the easiest way to pay my Delaware Franchise Tax?
Franchise tax for a Corporation or a Limited Liability Company can be filed and paid via our secure website.
Why does my Delaware Franchise Tax report get sent to my registered agent instead of directly to me?
The State of Delaware requires by law that all companies incorporated in this state have a registered agent. The State of Delaware will always contact the registered agent directly for all franchise tax notices and it is then the responsibility of the registered agent to send the notices directly to the client.
My company is no longer in business, what is involved in Closing my LLC or Corporation in Delaware and can Harvard help me in taking care of this matter?