There are three really important things that you need to keep in mind when you’re filing Delaware franchise tax.
The first of which is that it’s required for all Delaware incorporated startups, which pretty much means all startups. It doesn’t matter if you’re running at a loss or if you’re profitable. You do have to file. It’s just the privilege of doing business with the state of Delaware.
The second thing that you’re really going to want to keep in mind is that it’s due on March 1st. I know there’s a lot of things going on in January and February. But due market calendars, it is due March 1st.
The third thing to keep in mind is how much you’re going to need to pay. If you haven’t raised that much money, maybe 500,000 or a million, you’re probably going to pay about $400 to a thousand bucks. If you’ve raised 10 million bucks, then you’re going to pay about $4,000. But if you go to the Delaware website and you’re surprised with a $100,000 bill, something is definitely wrong.
Contact your CPA. Something has gone wrong in the calculation. Don’t be afraid. You do not actually owe a hundred thousand. You should only owe between 400 to 4,000 if you’ve raised up to 10 million bucks.
Need an accountant for your startup? Kruze Consulting is a leading accounting firm working with seed and venture funded Delaware C-Corps. Kruze Consulting provides all things Accounting and Tax, including interim CFO Consulting, financial modeling, annual taxes, R&D tax credit studies, venture debt consulting, 409A reporting, bookkeeping. Contact Kruze today!
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14 Feb 2019 - Vanessa Kruze, Founder and CPA