Learning Center, Managing Your Business

What Happens If I Do Not Pay My Franchise Tax?

In Delaware, Corporations are required to file an Annual Report and pay the Franchise Tax that is due on or before March 1 each year. If the Annual Report and taxes are not filed and paid by March 1 the following year, the corporation will be declared inoperative and void. In the next calendar year, you have to file what’s called a franchise tax, or an annual report from the previous year. Therefore, by March 1st of the year following, you need to file a report listing all the directors the company at the time you are filing this report along with one officer and their addresses.

We can assist you at DelawareAgency with this filing, if you fail to file this franchise tax then your company will no longer stay in good standing. Even if your company is not doing business, you need to file this franchise tax to keep your company going. 

Let’s list the requirements of the State of Delaware in order to maintain your Delaware company:

– Having a Delaware Registered Agent must be located at a street address in the state of Delaware which will carry out all official correspondence of the Secretary of State, as well as the other processes.

– Paying Delaware Franchise Tax.

– Filing an annual report (Only Delaware Corporations). It is necessary to report the workplaces, names, titles, and addresses of all managers and the name, title and address of an officer. The State of Delaware also requires current figures for gross assets and issues shares.

What to expect if you do not meet all these requirements?

Delaware Division of Corporations will invalidate or cancel your company unless you pay your Delaware Franchise Tax and keep a Registered Agent actively.

Besides, if you miss a Franchise Tax payment for your Delaware Corporation, LP or LLC, or you do not file the Delaware Corporation Annual Report, it will always be in the records of the Delaware Division of Corporations. So, if someone investigates the company, a missed Franchise Tax payment exists in the company’s history. This may not be attractive to potential investors.

Furthermore, if you do not pay your Delaware Franchise Tax for three consecutive years for LLC/ LP (for two consecutive years for Delaware Corporations), the State of Delaware will put in a Cancelled/Voided status.

If you have pre-sales questions, Call us + 1 302 310 21 76 (You can also text on WhatsApp!)