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Annual Costs Associated with a Delaware C-Corp

Annual Costs Associated with a Delaware C-Corp

17.02.2021 12:00 by Clemta

There are two requirements to pay to maintain a Delaware C-Corp. The first cost is annual franchise tax and the second one is registered agent service fee. Every C-Corp has different costs and there are two methods to calculate the annual franchise tax. Maintaining a registered agent is also required and Clemta can help you get a registered agent service while forming your company.

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 Corporations 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 Corporation. 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.