Delaware Franchise Tax Calculator

If you incorporated in Delaware, yes, you need to file and pay the Delaware Franchise Tax.

Do it online: https://corp.delaware.gov/paytaxes.shtml

Most of our startups pay between $400 - $10,000 in DE Franchise taxes. If you've received a bill for $75K, its because Delaware has calculated the tax using the Authorized Shares Method. Don’t freak out; recalculate using the Assumed Par Value Capital Method.

We often get the question, “why should my startup consider incorporating out-of-state and become a Delaware C-corp?”. Here are a few reasons why you would want to initially incorporate in Delaware.

Reasons Venture Capitalists Want Delaware C-Corps:

• A C-Corp structure retains the profits and losses at the C-Corp level. It is not a pass-through entity like LLCs or S-Corps where the profits or losses get passed through to investors, C-Corps C-Corps are friendly with the venture capitalists’ tax structure.
• There is a ton of litigation and VCs tend to understand what the rules are in Delaware
• Most importantly, venture capitalists would usually rather fund a Delaware C-Corp and will tell you to switch as soon as they invest in your company.

There are many things you must do after becoming a Delaware C-Corp. Click here to learn more.

Becoming a Delaware C-Corp is simple, but there is a lot of legwork. Our experts here at Kruze are happy to do it for you. Also at Kruze, another option is working with a PEO; that is how you "Incorporate in a state." Hope that helps, thanks.