Table of Contents
- 1- Filing an Annual Report
- 2- Paying the Annual Franchise Tax
- 3- Maintaining a Registered Agent
- 4- Holding at least an Annual Meeting of Shareholders
- Conclusion
If your business is a Delaware corporation, your company must follow certain annual compliance requirements to maintain its corporate status and stay in good standing with the state. These requirements include:
1- Filing an Annual Report
Every year, all Delaware corporations must file an annual report with the Delaware Secretary of State.
This report must include information about your corporation’s officers and directors, Its registered agent, and the number of shares it has issued.
The annual report is typically due by March 1st of each year, and failure to file it on time will result in a penalty of $200.00 plus 1.5% interest per month on tax and penalty.
2- Paying the Annual Franchise Tax
Delaware corporations are also required to pay an annual franchise tax, which is based on the corporation’s authorized shares of stock.
The franchise tax is due by March 1st of each year, and the amount you owe will depend on the number of shares your corporation has issued.
The franchise tax rate for Delaware corporations varies depending on the number of shares issued, with a minimum tax of $175 for corporations with fewer than 5,000 shares.
3- Maintaining a Registered Agent
Every Delaware corporation must have a registered agent who is responsible for receiving legal documents such as the service of process on behalf of the corporation.
The registered agent must be a person or business entity located in Delaware, and the corporation must keep its contact information up to date with the Delaware Secretary of State.
If your corporation does not have a registered agent, or if the contact information for your registered agent is out of date, your corporation could be at risk of losing its good standing status with the state.
4- Holding at least an Annual Meeting of Shareholders
Delaware corporations are required to hold an annual meeting of shareholders, where the corporation’s officers and directors are elected and other important matters of operation are discussed.
The exact date of the meeting must be recorded in the corporation’s minutes, and notice of the meeting must be given to all shareholders.
The discussion of shareholders can be held in person or through electronic means, such as a conference call, as long as all shareholders have the opportunity to participate.
Conclusion
By following these annual compliance requirements, your Delaware corporation can remain in good standing with the state and avoid potential penalties.
It is important to keep track of these requirements and make sure they are completed on time each year. If you have any questions or need assistance with these requirements, you can contact the Delaware Secretary of State or seek advice from a qualified attorney, such as the team at Sutter Law.
Our experienced attorneys can help you navigate the annual compliance requirements for your Delaware corporation and ensure that your business stays in good standing with the state. Contact us today to learn more.
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