If you incorporated in Delaware, you need to pay a Delaware Franchise Tax. The calculator below will help you estimate how much you’ll need to pay. The deadline is typically the last day of February - scroll down to access links to visit the Delaware Division of Corporations webpage where you can pay.
If you incorporated in Delaware, yes, you need to file and pay the Delaware Franchise Tax.
February 28th of every year.
Do it online: https://corp.delaware.gov/paytaxes.shtml
The vast majority of our startups use the Assumed Par Value Capital Method because it results it significantly less tax.
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.
Par value is the value per share. From the cap tables we've seen, the par value is usually set at $0.0001 or $0.00001. The par value has no connection to the market value of the share of stock.
12/31/XX (most often)
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:
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.
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