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Editorial 6 MIN READ

Delaware's 2024 annual maintenance, in full

One state, two regimes, and the reason LLCs here never file an annual report

The Editors
Staff, Incorporator.org
6 min read Updated
Contents 6 sections
  1. The LLC regime: a tax, not a report
  2. The corporate regime: report, plus franchise tax
  3. The filing portal
  4. Foreign entities and series
  5. What the corporate maintenance number actually looks like
  6. Sources

Delaware LLC does not file an annual report. It pays a flat $300 tax on June 1 and owes nothing else to the state until next June. A Delaware corporation does the opposite: it files an annual report by March 1, pays a $50 filing fee, and pays franchise tax on top. Same state, two regimes, and the one that catches founders out is almost always the corporate one.

There are roughly 1.9 million business entities on the Delaware rolls in 2024, which is more entities than the state has residents. The compliance calendar below is what keeps them in good standing.

The LLC regime: a tax, not a report

The authority is 6 Del. C. § 18-1107(g). Every domestic LLC, every foreign LLC registered to do business in Delaware, and every series within a registered series structure pays an annual tax of $300 to the Division of Corporations. The tax is flat. It does not scale with revenue, assets, members, or whether the entity did any business at all. A Delaware LLC that was formed on May 31 and dissolved on June 2 still owes the full $300 for that year.

The due date is June 1 of each year for the prior calendar year. If you form in February 2024, your first $300 is due June 1, 2025. Delaware does not prorate. Delaware does not send a paper bill to most entities; the notice, if it comes, is a single-page postcard that looks like a solicitation and gets thrown out. Registered agents generally email reminders on their own cadence, which is one of the things you are paying them for.

The distinctive part is what is missing. Unlike almost every other state, Delaware requires no annual report from its LLCs. There is no form listing members, managers, officers, or addresses. There is no update of the registered office. The state's position, effectively, is that it wants the $300 and not your paperwork. California wants both. New York wants both. Delaware wants the money.

Missing the June 1 deadline triggers a $200 late penalty plus interest at 1.5 percent per month on the unpaid tax, under the same statutory scheme. Miss enough years and the LLC ceases to be in good standing, which means it cannot obtain a certificate of good standing from the Division, cannot file a merger or conversion, and in most cases cannot sue in a Delaware court until it cures. The cure is paying the back taxes and penalties. The Division does not administratively cancel an LLC for nonpayment; it lets the charges accrue indefinitely. A five-year-old lapsed LLC will owe $1,500 in tax, $1,000 in penalties, plus interest, before anyone signs a certificate of revival.

If an LLC is actually wound down, the correct move is to file a Certificate of Cancellation. The filing fee is $200, and once cancelled the entity stops accruing the $300 annual tax. Owners who stop paying without cancelling are postponing a larger bill they may eventually need to clear to extract a stranded bank account or receivable.

The corporate regime: report, plus franchise tax

Corporations are the other regime entirely. Under 8 Del. C. § 502, every domestic corporation must file an annual report with the Secretary of State on or before March 1 of each year for the preceding calendar year. The annual report fee is $50. The report requires the corporation's principal office address, the name and address of each director and one officer, the number of authorized shares by class, and the identity of the corporation's officer filing the report.

Franchise tax rides on top of the $50. Delaware computes franchise tax two ways under 8 Del. C. § 503. The Authorized Shares Method starts at $175 for corporations with 5,000 or fewer authorized shares and rises in bands up to a cap of $200,000 for corporations with billions of authorized shares. The Assumed Par Value Capital Method is a separate calculation based on issued shares, gross assets, and par value; its floor is $400. The statutory maximum franchise tax for most corporations is $200,000, with a separate $250,000 cap for Large Corporate Filers that meet the revenue and asset thresholds the Division publishes.

The trap in the corporate regime is that Delaware prints the Authorized Shares number on the notice by default, even when the Assumed Par Value calculation would be dramatically lower. A newly funded C-corp with 10,000,000 authorized shares at $0.0001 par value will see a notice in January for roughly $85,000 in franchise tax under the default method, panic, and call counsel. Run the Assumed Par Value calculation against actual issued shares and a small asset base, and the bill drops to the $400 minimum in most early-stage cases. The Division accepts the lower number; it just does not volunteer it.

Section 502(c) provides the penalty mechanics. A corporation that fails to file its annual report or pay franchise tax by March 1 is assessed a late penalty of $200 plus interest of 1.5 percent per month on the unpaid amount. Two consecutive years of delinquency puts the corporation into the category where its charter can be declared void by proclamation of the Governor under § 510. Reviving a void corporation is more expensive and more procedurally involved than reviving a delinquent LLC, which is why corporate counsel tends to treat the March 1 date with a different kind of seriousness.

Foreign corporations registered to do business in Delaware file an annual report of their own under 8 Del. C. § 374, on or before June 30, with a filing fee of $125. They do not pay Delaware franchise tax on the corporation itself; the report is a registration-maintenance document, not a tax return.

The filing portal

All of this goes through the Division of Corporations, which publishes the calendar on corp.delaware.gov and runs the filings through its eCorp portal at icis.corp.delaware.gov. Corporations file their annual report and franchise tax together; the system walks the filer through both computation methods and lets them pick the lower. LLCs pay the $300 tax in the same portal under a shorter transaction that needs only the file number and a payment method. ACH is free; credit-card payments carry a surcharge. The March 1 and June 1 cutoffs are calendar dates, and the system timestamps in Eastern Time.

Foreign entities and series

Foreign LLCs registered to transact business in Delaware owe the same $300 under § 18-1107(g), on the same June 1 schedule. The statute does not carve them out. A California LLC that qualified in Delaware in 2022 owes California its $800 and Delaware its $300, every year, until one of the registrations is formally withdrawn.

Series LLCs and registered series get distinct treatment under subsequent 2019 and 2020 amendments to the Delaware LLC Act. A protected series within a series LLC is not separately taxed; the master LLC pays one $300 tax. A registered series, the 2019 creation that files its own certificate, pays its own $75 annual tax on June 1 (a reduced amount set by statute specifically for registered series). This matters for fund managers and real-estate sponsors who use the structure for the asset-segregation benefit: the registered series option is cheaper per series than spinning up standalone LLCs, but it is not free.

What the corporate maintenance number actually looks like

For most early-stage Delaware C-corps with a modest authorized-share count and the Assumed Par Value method filed correctly, annual maintenance runs $450: the $50 report fee plus the $400 franchise tax floor. For a Delaware LLC, it is exactly $300. The number that catches founders is the one produced by treating the January notice as a bill rather than as an opening position.

The quiet thing about Delaware's maintenance regime is how permissive it is of entities that are not currently operational. A Delaware LLC can sit dormant for a decade at $300 a year, accumulate no documentation obligation, and be revived for ordinary-course use by a single payment run. That permissiveness is part of why the rolls hit 1.9 million. It is also why the registered-agent market exists in its current shape: the state has outsourced the compliance reminder to a private market that mails the postcard Delaware declines to send.

Sources

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