Delaware franchise tax deadline: corporations vs LLCs
Delaware corporations file an annual report and pay franchise tax by 1 March. Delaware LLCs pay a flat $300 by 1 June. Both carry penalties and interest if late.
- Published
- Reading time
- 1 min read
Delaware is where most US startups incorporate, and where many non-resident founders form LLCs. The annual tax is easy to forget because Delaware's dates are not the IRS's.
The dates
| Entity | What | When |
|---|---|---|
| Corporation | Annual report and franchise tax | 1 March |
| LLC, LP, GP | Annual tax ($300) | 1 June |
Corporations: two methods
- Authorised shares method: the default. A startup with 10 million authorised shares can receive a bill of tens of thousands of dollars.
- Assumed par value capital method: uses gross assets and issued shares. For most early startups, it produces a bill of a few hundred dollars.
You can file using the method that gives the lower tax.
Penalties
- LLCs: $200 penalty plus 1.5% interest a month.
- Corporations: a penalty for late filing plus interest.
- Both: loss of good standing, which shows up when a bank or investor asks for a certificate.
Other annual items
Foreign-owned single-member LLCs and 25% foreign-owned corporations may need Form 5472 with the IRS. See Form 5472 guide.
Paying into the United States: the local rail
| What | Detail |
|---|---|
| Local rail | ACH for batch payments; RTP and FedNow for instant transfers |
| Run by | Nacha for ACH; The Clearing House for RTP; the Federal Reserve for FedNow |
| Settlement | Same-day ACH within the business day, standard ACH the next; RTP and FedNow in seconds, 24/7, where both banks take part |
Source: Nacha: Same Day ACH. Checked when this guide was last updated; the scheme's own page has the current figures.
Where Rivet fits
Rivet opens accounts for Delaware LLCs and corporations, including those owned from abroad, with USD details for ACH and wires on the free Starter plan. Paying the state from a Rivet balance works like any ACH payment. Rivet is not a bank; regulated partner institutions hold the funds. See Delaware vs Wyoming LLC for non-residents.
Questions people ask
When is Delaware franchise tax due?
1 March for corporations, with the annual report. 1 June for LLCs and LPs.
How much is Delaware franchise tax for an LLC?
A flat $300 a year.
Why is my corporation's franchise tax bill so high?
The default authorised shares method can produce large bills for startups with millions of authorised shares. Recalculating with the assumed par value capital method often reduces it sharply.
What happens if I miss it?
Penalties and interest accrue, and the entity can lose good standing, which banks and investors check.
Sources
Alexia compares the accounts, cards and payment tools companies weigh before they switch, and writes Rivet's market guides for founders in a specific country. Prices in Alexia's comparisons come from each provider's own pricing page on the date given in the article, rules come from the regulator or tax authority that sets them, and every source is listed at the end.
More from Alexia M. →This article is general information, not legal, tax or financial advice. Rules and fees change; check the sources above and the provider’s current terms before you act on them.
- delaware franchise tax
- delaware annual report
- delaware llc tax
- startups
- c corp
- us
