Delaware compliance for lean companies

Registered agent: Delaware requires every entity formed or registered in Delaware to maintain a registered agent in the state. Use a reliable (cost-effective) commercial registered agent to receive official notices and annual tax/filing reminders. 2) Annual taxes and reports — timelines and amounts: - Corporations (domestic): file Annual Report and pay Delaware Franchise Tax online by March 1 each year for the prior year. Annual report fee: $50 (non‑exempt). Franchise tax calculation methods: Authorized Shares method (minimum tax currently $175) and Assumed Par Value Capital method (minimum $400); maximum tax generally $200,000 (special Large Corporate Filer rules can raise this). Late filing penalty: $200 plus 1.5% interest per month on tax and penalty. (Delaware Division of Corporations) - Foreign corporations registered to do business in DE: file Annual Report by June 30; fee $125 and $125 penalty for late filing. - LLCs/LPs/GPs (domestic or foreign formed/registered in DE): pay an annual tax of $300 due June 1 each year. There is no LLC annual report filing requirement. Penalty for nonpayment: $200 plus interest at 1.5% per month. - Estimated payments: taxpayers owing $5,000 or more must pay estimated franchise taxes quarterly (40% due June 1, 20% Sept 1, 20% Dec 1, remainder Mar 1). 3) Business license and other state taxes: - Delaware has no statewide sales tax (advantage for many lean companies). However, businesses that are operating in Delaware may need to obtain a Delaware business license from the Division of Revenue and pay gross receipts tax if applicable. If you are incorporated in DE but do not operate there, you often will not need the state business license — check onestop.delaware.gov and the Division of Revenue guidance. - Delaware corporate income tax applies when a company is doing business in Delaware; pass-through entities’ owners pay tax where they reside or operate. Consult a CPA for nexus issues and multistate tax planning. 4) BOI (FinCEN) — Corporate Transparency Act considerations: - The BOI reporting rule has seen regulatory adjustments. FinCEN’s official guidance (and an interim final rule published in the Federal Register) materially changed the application and deadlines in 2025, including exemption treatment for many domestic entities and revised deadlines for certain foreign reporting companies. FinCEN’s BOI e‑filing portal and Small Entity Compliance Guide are the authoritative sources for current deadlines and exemptions. - Because the rule changed after initial implementation, check FinCEN and the Federal Register for the latest applicability and deadlines for your company. Failure to comply (when required) can trigger civil penalties (statutory daily amounts adjusted for inflation) and criminal penalties in severe willful cases. 5) Practical compliance checklist and cost-saving tips for lean companies (practical guidance): - Choose entity type with Delaware compliance in mind: LLCs pay a flat $300 annual tax (simple predictable cost) and no state annual report; corporations must file March 1 and can face variable franchise taxes. Weigh investor preferences vs. long-term operating cost. - Manage authorized shares smartly: for corporations, limiting authorized shares (consistent with investor needs) and using the alternative calculation method where appropriate can reduce franchise tax. Run Delaware’s franchise tax calculator before filing. - Use a low-cost commercial registered agent and enable automated reminders so you don’t miss March 1 / June 1 deadlines. - Centralize records: signed bylaws/operating agreement, minutes, capitalization table, and up-to-date officer/director (or member/manager) information to make filings fast and accurate. - File online via Delaware e‑filing to avoid processing delays and ensure timely payments. - If you operate outside Delaware: consider whether you must foreign‑qualify in other states (and pay other states’ fees/taxes); for many lean startups that do business in a single other state, it may be simpler to form in that state — evaluate total compliance costs. - Monitor FinCEN BOI guidance and file if your company is a “reporting company” (or loses an exemption). Keep beneficiary identity info ready (legal name, DOB, address, SSN/ITIN or passport number per filing requirements) so BOI filing is quick. 6) Penalties, reinstatement, and enforcement: late or missing payments result in monetary penalties and interest; prolonged noncompliance may lead to loss of good standing or administrative dissolution/forfeiture and will complicate financing and banking. Delaware’s Division of Corporations provides reinstatement guidance and contact info for Franchise Tax questions — if you fall behind, contact them early to determine the steps to reinstate and pay accrued amounts. Recommended immediate action list for a lean Delaware company: 1. Confirm registered agent and ensure contact info is current. 2. Create and store an Operating Agreement (LLC) or Bylaws + initial minutes (Corp). 3. Obtain EIN and open a business bank account. 4. Calendar these deadlines: March 1 (domestic corporations annual report & franchise tax), June 1 (LLC $300 annual tax), June 30 (foreign corp report), estimated tax installment dates if applicable. 5. Check FinCEN BOI guidance and file (or confirm exemption) if required. 6. If you operate in other states, evaluate foreign qualification and multistate tax nexus.

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