fbpx

Annual Costs Associated with a Delaware C-Corp

Annual costs and fees associated with a Delaware C-Corp is clarified.
Businesswomen working on annual report

Annual Costs Associated with a Delaware C-Corp

Table of Contents

To maintain a Delaware C-Corp, you are required to pay two annual costs or fees. Firstly, you will be responsible for paying an annual franchise tax. Franchise Tax is not calculated based on your company’s income. Delaware law requires companies incorporated in Delaware to pay annual franchise tax to keep the company in “good standing”. Even companies with no business activity must pay franchise tax to maintain “good standing” status.

The second cost is a registered agent service fee.

What is an Annual Franchise Tax?

Every state has slightly different requirements for corporations but Delaware C-Corps pay Franchise Tax due March 1st of each year. The Franchise Tax for a corporation is based on your corporation type and the number of authorized shares your company has. You can visit https://corp.delaware.gov/paytaxes/  to find out about up-to-date Corporation Franchise Tax.

There are two methods to calculate Franchise Tax for a maximum stock company: Authorized Shares Method and Assumed Par Value Capital Method. You can visit https://corp.delaware.gov/frtaxcalc/ to calculate Franchise Taxes for your Delaware C-Corp. Delaware C-Corps are also required to file an annual report.

Who is a Registered Agent?

The second cost is a registered agent service fee. Maintaining a registered agent for corporations is required by Delaware Law.  According to The Delaware Code, every corporation shall have and maintain a registered office and agent.

After you choose your company entity and the name of your company, you must hire a registered agent. Your registered agent can be an individual who lives in the state or a business entity. It must maintain a physical address and obligated to be available during normal business hours in order to receive legal notices. You will need to pay an annual fee to your registered agent to serve as your representative and accept legal paperwork on behalf of your business.

Explore more
IRS Form W-8BEN Certificate of foreign status of beneficial owner for United States tax withholding
State Tax | Annual Report

The annual report intends to provide necessary information for the filing offices, other government agencies, the public, and the investors. It includes your location and contact information through which such parties can communicate with you.

Read More »