Consequences of not paying Delaware Franchise Tax
Delaware franchise tax is owed every year regardless of income or activity: LLCs and LPs pay a flat annual tax by June 1, while corporations pay a share-based tax plus an annual report by March 1. Missing the deadline triggers a $200 penalty and 1.5% monthly interest, and immediately costs the company its good standing. A corporation's charter becomes void after two years of non-payment and an LLC is administratively cancelled after three, after which the entity can only be restored by filing a revival certificate and paying every year of back tax, penalty and interest.
