If your business is registered in Delaware, the Delaware Franchise Tax deadline is not optional and it is not only for tech startups or ecommerce founders. It applies to every company that is incorporated or formed in Delaware, even if you have zero revenue, no customers, or the business is inactive.
Missing this deadline leads to penalties, interest, and in worst cases, loss of good standing. That can block bank accounts, payment processors, fundraising, and even company dissolution. So this is a compliance task you cannot ignore.
Who Actually Needs to Pay
You must file and pay Delaware Franchise Tax if:
- Your company is a Delaware C-Corporation or S-Corporation
- Your company is a Delaware LLC
- You used services like Stripe Atlas, Firstbase, Clerky, or similar incorporation platforms
- You are a non-US founder but your company is legally registered in Delaware
You do not need to pay if:
- You are a sole proprietor
- Your company is incorporated in another US state
- You never formed a Delaware legal entity
Key Deadlines
Corporations
- Deadline: March 1 every year
- Requirement: File Annual Report and pay Franchise Tax
LLCs, LPs, LLPs
- Deadline: June 1 every year
- Requirement: Pay flat Franchise Tax only, no annual report
What Happens If You Miss It
Ignoring this leads to:
- Late fees starting immediately
- Monthly interest added to the tax
- Loss of “Good Standing” status
- Problems opening or maintaining bank accounts
- Investors refusing to fund
- Possible administrative dissolution
In short, your company becomes legally weak and operationally risky.
Step-by-Step: What You Must Do
Step 1: Confirm Your Entity Type
Check your incorporation documents or your registered agent dashboard.
You need to know whether you are:
- Corporation
- LLC
This decides both your deadline and tax amount.
Step 2: Visit the Delaware Division of Corporations Website
Search “Delaware Franchise Tax payment” and use the official state website only. Avoid third-party payment sites unless you trust them.
Step 3: Enter Company Details
You will need:
- File number
- Company name
- Registered agent details
- EIN if available
An LLC is not fully usable until the EIN is issued by the IRS.
You can apply manually or include EIN filing with Northwest to save time. Click here to apply
(Learn what an EIN does and how to apply correctly)
These are usually in your incorporation email or dashboard.
Step 4: Calculate Your Tax
LLCs:
- Flat fee, usually $300
Corporations:
- Tax varies based on:
- Authorized shares
- Assumed par value method
- Company size
Most small startups end up paying between $175 and $400, but it can be higher if share structure is large.
Step 5: Submit Payment
- Pay via card or bank transfer
- Save the receipt immediately
- Download confirmation PDF
Do not rely on email alone. Always keep a local copy.
Step 6: File Annual Report (Corporations Only)
This is done during the payment process.
You will fill:
- Director names
- Company address
- Business activity category
LLCs skip this step.
Step 7: Verify Good Standing
After payment, check “Certificate of Good Standing” status on the Delaware website.
This confirms compliance and is often required by banks and investors.
Smart Pointers to Avoid Stress
- Set two reminders every year, one month before and one week before the deadline.
- Keep incorporation documents in a cloud folder.
- Use a registered agent service with reminder emails.
- Avoid unnecessary high share authorizations when forming a corporation.
- Pay early. There is no benefit in waiting till the last day.
Common Mistakes Founders Make
- Assuming it only applies to US residents
- Forgetting the deadline because there is no revenue
- Thinking Stripe or their accountant auto-pays it
- Ignoring emails from the registered agent
- Not understanding the difference between LLC and Corporation rules
Final Thought
Delaware Franchise Tax is not a business tax based on profit. It is a legal maintenance fee for the privilege of having a Delaware entity. Whether you run ecommerce, SaaS, consulting, or an inactive startup, compliance is mandatory. Treat it like a yearly license renewal for your company. Missing it is avoidable, fixing it later is expensive.