Every Delaware corporation must file an annual franchise tax report and pay its franchise tax by March 1 for the previous calendar year. The report is filed online with the Delaware Division of Corporations, and the filing fee is $50 ($25 for exempt corporations such as nonprofits). The tax is computed by one of two methods and you pay the lower. A typical startup with 10,000,000 authorized shares sees $85,165 on the default notice but owes $400 to a few thousand dollars once it reports its issued shares and gross assets. Miss March 1 and you pay a $200 penalty plus 1.5% interest a month; a year of non-payment voids the company's charter.
Want the number for your own company first? Use our free Delaware franchise tax calculator: it runs both methods side by side, with the same rules described below.
Quick answer
| Delaware corporation (C corp) | Delaware LLC, LP or GP | |
|---|---|---|
| Annual report? | Yes, the annual franchise tax report | No annual report |
| Due date | March 1, for the previous year | June 1, for the previous year |
| Filing fee | $50 ($25 if exempt) | None |
| Tax | Franchise tax: $175 or $400 minimum, $200,000 maximum | Flat $400 annual tax |
| Late penalty | $200 plus 1.5% interest a month | $200 plus 1.5% interest a month |
| How to file | Online only, at the Division of Corporations | Pay online |
Sources: Delaware Division of Corporations, Annual Report and Tax Instructions and LLC/LP/GP Tax Instructions, read October 20, 2026.
Who has to file, and when
Under 8 Del. C. § 502(a), "annually on or before March 1, every corporation" formed under Delaware's General Corporation Law makes an annual franchise tax report. That includes a corporation that has not started trading, has no revenue, or is owned entirely by founders outside the US. Delaware's own FAQ says a company that has not started doing business still files and pays.
- Domestic corporations (formed in Delaware): report and tax due March 1.
- Exempt domestic corporations (non-profits, 501(c) organizations and the other categories in § 501(b)): file the report, pay the $25 fee, pay no tax.
- Foreign corporations (formed elsewhere, registered in Delaware): a separate annual report due June 30, with a $250 fee.
- LLCs, LPs and GPs: no annual report. They pay a flat annual tax of $400 by June 1. That figure rose from $300 under House Bill 400 (85 Del. Laws c. 273, effective January 1, 2026). Many guides still say $300.
The calendar
- December: Delaware prints the tax notices and sends them to every corporation's registered agent, not to the company (corp.delaware.gov/frtax).
- January 1: the filing window for the previous year opens, according to registered agents such as LegalZoom and IncNow. Delaware's pages state the due date, not an opening date. You need your year-end gross assets anyway, so filing in January or February is normal.
- March 1: report and tax due.
- June 1, September 1, December 1: estimated payments of 40%, 20% and 20% of the current year's tax if it is $5,000 or more (§ 504(a)). Most seed-stage companies are well below that.
Your first report is due on March 1 of the year after you incorporate. A company formed in 2026 files its first report by March 1, 2027. For the federal dates around it (W-2s and 1099s on February 1, Form 1120 on April 15), see our startup tax calendar for 2027.
What the report asks for
Section 502(a) lists the contents. In the online form you will confirm or enter:
- The registered office address and registered agent (already on file; you cannot change the agent through the annual report).
- The nature of the business. This became a required item for reports filed after August 1, 2025 (Senate Bill 95, 85 Del. Laws c. 48), and the Division's filing page now flags it in bold.
- The principal place of business. Since the same 2025 change, it may not be the address of your registered agent or of any other registered agent, so a startup without an office lists its real operating address.
- The names and addresses of all directors as of the filing date, and the name and address of the officer who signs.
- Authorized shares and par value for each class of stock.
- Issued shares (including treasury shares) and total gross assets, if you want the Assumed Par Value Capital method. This is the part that decides your tax.
The report must be signed by the president, secretary, treasurer or another authorized officer, or by any director. Annual reports are public records, but the tax figures on reports filed after tax year 2006 are not (§ 502(e)). A knowingly false statement on the report is perjury (§ 502(b)).
The fee and the franchise tax
The filing fee is fixed by 8 Del. C. § 391(a)(18): $50 for ordinary corporations, $25 for exempt ones.
Did the fee go up in August 2026? No. Delaware raised many filing fees on August 1, 2026 (incorporation is now $109, see the fee schedule revised August 1, 2026). The law behind it, House Bill 400, changed the foreign corporation report fee ($125 to $250) and the LLC/LP/GP tax ($300 to $400), but it did not amend § 391(a)(18), the franchise tax rates in § 503 or the due dates. The Division's own pages still list the $50 and $25 fees as of October 20, 2026.
The franchise tax is set by § 503(a), which says you pay "whichever ... is the lesser" of two methods:
- Authorized Shares method: $175 for up to 5,000 authorized shares, $250 for 5,001 to 10,000, plus $85 for each further 10,000 shares or part of 10,000. It looks only at your charter, so 10,000,000 authorized shares cost $85,165.
- Assumed Par Value Capital method (APVC): divide total gross assets by total issued shares, to six decimals: that is the assumed par. Multiply it by the authorized shares of every class whose par is below it (classes with a higher par count at their own par). The result is the assumed par value capital. Tax is $400 per $1,000,000 or part of a million, prorated below $1,000,000, with a $400 minimum.
Both methods are capped at $200,000 a year; listed companies classed as large corporate filers pay $250,000 (§ 503(c)). The full method, with Delaware's own worked example, is on the Division's How to Calculate Franchise Taxes page.
Why the notice says $85,165
Delaware does not know your issued shares or assets until you tell it, so the notice it sends in December is computed with the Authorized Shares method. Section 503(b) says that unless you report your issued shares and total gross assets with the annual report, you pay under that method. And if you file nothing, § 502(c) has the Secretary of State fix the tax under the same method. The large number is not a mistake on Delaware's side. It is what you owe if you never give the state the inputs for the cheaper method.
Worked example: a seed-stage SaaS company
Take a company with one class of common stock: 10,000,000 shares authorized at $0.00001 par, 8,500,000 issued (founders, early employees, exercised options), no preferred stock yet, and $2,400,000 of total assets at year end after a seed round.
| Step | Authorized Shares method | Assumed Par Value Capital method |
|---|---|---|
| Inputs | 10,000,000 authorized shares | $2,400,000 assets ÷ 8,500,000 issued shares |
| Intermediate | $250 + 999 × $85 | Assumed par $0.282353 (above the $0.00001 par), × 10,000,000 = $2,823,530 assumed par value capital |
| Tax | $85,165 | Rounds up to 3 million × $400 = $1,200 |
| Plus report fee | $85,215 | $1,250 |
Reporting two numbers cuts the bill by $83,965. The same company a year earlier, with 9,000,000 shares issued and $500,000 of assets, has an assumed par value capital of $555,560, so the APVC tax is below $400 and the minimum applies: $400 plus the $50 fee. You can enter these figures into the calculator and get the same results.
Two things move the APVC number. Gross assets go up after a round, because the cash raised sits on the balance sheet, so the tax rises as you grow (with 9,000,000 shares issued and $12,000,000 of assets it is $5,600). And issuing more shares lowers the assumed par. Authorizing more shares in a new round raises both methods, which is why it is worth running the calculator before a charter amendment. For the full cost picture by stage, see what a startup's finance stack costs.
Where to find the two inputs
- Total gross assets: the "total assets" line on Schedule L of your federal Form 1120 for the fiscal year ending in the year being reported (Delaware FAQ). If the return is not done yet, use the year-end balance sheet total and make sure it matches when the return is filed.
- Issued shares: all classes, including treasury shares, from your cap table. Unexercised options and unconverted SAFEs are not issued shares. Our cap table calculator helps if you do not keep one in a dedicated tool.
How to file the Delaware annual report, step by step
- Find your file number. It is the Delaware entity file number shown on your filed certificate of incorporation and on the tax notice. If you have lost it, look the company up in the Division's entity search.
- Gather the data: principal business address, nature of business, all directors' names and addresses, the signing officer, authorized and issued shares by class, and total gross assets.
- Open the filing system from corp.delaware.gov/paytaxes (the "File your annual report and pay business entity tax" link goes to
icis.corp.delaware.gov/ecorp/logintax.aspx). It runs daily from 8:00 am to 11:45 pm Eastern. Use plain English characters only; the Division warns that others can corrupt the record. - Enter or confirm the report data. For a long director list you can attach a PDF, but you still type the number of directors. You can save a session and come back: the session ID lasts two weeks, and a saved session is not a filed report.
- Enter issued shares and gross assets so the system recalculates the tax under APVC. Check the tax shown against your own calculation before you pay.
- Pay. Credit card or ACH debit; ACH is required for any payment over $5,000. Click submit once, because repeated clicks can charge the card twice.
- Save the acknowledgement. The report is filed only when you press "Submit Filing" and the payment goes through. You can view or email the acknowledgement copy right away.
You can also have your registered agent or incorporation service file for you. Most charge a service fee on top of the state fees, and not all of them use the APVC method by default, so give them your issued shares and assets and check the tax they report. What the main services include is covered in Stripe Atlas pricing and Clerky pricing; startup bookkeeping and tax firms often include the filing in their tax package (see startup bookkeeping cost).
Deadlines, penalties, void status and revival
- Late or incomplete report: a $200 penalty, added to the tax (§ 502(c)).
- Interest: 1.5% for each month or part of a month that tax remains unpaid (§ 504(c)). Delaware applies it to tax and penalty together. A $400 tax filed late becomes $600, plus $9 of interest for every month it stays unpaid.
- No good standing: the Secretary of State will not issue a certificate of good standing while tax is unpaid or the report is missing (§ 502(f)). Banks, investors' counsel and acquirers routinely ask for one, so a missed report can hold up a financing round.
- Void after one year: if a corporation fails for one year to pay its franchise tax or to file a complete report, its charter becomes void and its powers are "inoperative" (§ 510). By November 30 each year Delaware notifies defaulting corporations that the charter will be void unless they pay and file by the following March 1. Some guides say void status takes three years; the statute says one.
- Revival: a void corporation can file a certificate of revival under § 312, approved by its board, with a $189 state fee plus all franchise taxes, penalties and interest that were due. If the charter has been void for more than five years, the company pays three times the current year's annual tax instead of the back taxes and penalties. Revival validates acts done while the charter was void.
Common founder mistakes
- Paying the notice as printed. The notice uses the Authorized Shares method. File the report with issued shares and gross assets first.
- Thinking a dormant company owes nothing. The tax applies every year the corporation exists until a certificate of dissolution or merger is filed. A company that did not engage in its business for part of the year can claim half the rate for that part on the report (§ 503(f)), and Delaware may ask for an affidavit.
- Waiting for mail. The notice goes to your registered agent. If the agent's emails land in a shared inbox nobody reads, nobody sees it.
- Using the registered agent's address as the principal place of business. Not allowed since August 2025, unless you are your own registered agent in Delaware.
- Leaving out "nature of business" or listing only some directors. Both are required items.
- Paying a lookalike invoice. Delaware warns about mailings that imitate state notices, including one from "Corporate Records Service" asking $125 for meeting minutes. Official mail comes from the State or your registered agent. Ignore any letter asking a fee for a federal BOI filing too: a Delaware corporation no longer files one (see BOI reporting in 2026).
- Confusing a Delaware LLC with a C corp. An LLC has no annual report and pays $400 by June 1; a C corp files by March 1.
- Not budgeting for growth. After a large round the tax can pass $5,000, which brings estimated payments starting June 1. Put the tax in your runway plan, not only in March.
FAQ
When is the Delaware annual report due?
March 1 every year, for the previous calendar year, together with the franchise tax. Foreign corporations file by June 30; LLCs, LPs and GPs pay their annual tax by June 1 and file no report.
How much does it cost to file a Delaware annual report?
The state filing fee is $50 ($25 for exempt corporations), plus the franchise tax. For most startups that file with the Assumed Par Value Capital method, the tax is the $400 minimum or a few thousand dollars, so the total is usually $450 and up. A registered agent or filing service adds its own fee.
Can I file the Delaware annual report early?
Yes, from the start of the year. Registered agents report that the online system takes the previous year's report from January 1, and you need year-end figures for gross assets anyway.
What happens if I don't file my Delaware annual report?
You owe a $200 penalty plus 1.5% interest a month, Delaware fixes your tax under the Authorized Shares method, and you cannot get a certificate of good standing. After one year without filing or paying, the corporation's charter becomes void. You can revive it, but you pay the back taxes, penalties, interest and a $189 revival fee.
Why is my Delaware franchise tax so high?
Because the notice uses the Authorized Shares method, which charges $85 for every 10,000 authorized shares. Report your issued shares and gross assets so the Assumed Par Value Capital method applies; you pay whichever method is lower. The calculator shows both.
Do I have to file if my company had no revenue?
Yes. The tax and report apply to every Delaware corporation that exists during the year, whatever its revenue or activity. Only a filed certificate of dissolution or merger stops them.
Do Delaware LLCs file an annual report?
No. Delaware LLCs, LPs and GPs file no annual report, but they pay a flat $400 annual tax by June 1, with a $200 penalty plus 1.5% monthly interest if late.
Fees, dates and rules from the Delaware Division of Corporations and Title 8 of the Delaware Code, read on October 20, 2026. This guide is general information, not legal or tax advice. Check the figures you file against your tax return and ask your lawyer or CPA about your company's situation.
The franchise tax is a small but certain line in a startup's yearly costs, and it grows with every round. To see it next to payroll, tools and runway in one forecast, model it in Adlega.