What taxes do I have to pay to the State of Delaware?

Delaware requires each corporation to file an annual franchise tax return.  For corporations with 1,500 shares of no-par stock (our standard incorporation), the annual franchise tax is $175 USD plus a filing fee of $50 USD.  If your company has more stock, the franchise tax is greater up to a maximum of $180,000 USD. Each LLC pays $300 USD per year. As your registered agent, Delaware Corporate Agents will notify you that your tax is due. The franchise tax must be paid electronically and the annual report for corporations must be filed electronically. If you do not do business in Delaware, this is the only tax you will pay to Delaware.

What is a registered agent?

Every state requires that each company designate an agent within the state of its formation to accept service of process if the company is sued. Delaware Corporate Agents provides that service to you. The agent also receives from the Secretary of State of the State of Delaware notice that your annual franchise tax bill is due and notifies you. At the current time, our fee for this service is just $125 USD per year.  Beginning with the second calendar year, we bill you for the registered agent fee. Don’t forget to add delcorp@delcorp.com to your contacts so that our email to you will not go to junk mail.

I want to have a Subchapter-S corporation. Do I need a different corporate form?

Under the Federal tax laws, corporations are taxed under either Subchapter-C or Subchapter-S. To be taxed under Subchapter-S, the corporation must make a written election on a form published by the Internal Revenue Service (Form 2553). Electing to be this type of corporation does not require any different type of filing with the State of Delaware, however the certificate of incorporation which we prepare for Subchapter-S corporations contains provisions to avoid the real risk of accidentally losing the election. A Subchapter-S corporation is treated for tax purposes substantially as though it were a partnership and there is no double taxation of income. Income and some losses are generally included in the shareholder’s tax return. You should consult with your tax professional before determining to be a Subchapter-S corporation. We prepare the election form for you, however, the form must be signed by all stockholders and you must file it yourself with the IRS.

How long does it take to incorporate or form a LLC?

We will prepare the certificate and transmit it to the Secretary of State within one business day after we receive complete information and payment from you.

Can I send my mail to your address?

No, we cannot accept mail, fax or telephone calls for you unless you have made prior arrangements and paid Delaware Corporate Agents an additional fee.  Depending on the service which you select, mail can be forwarded daily, weekly or monthly.  If you do not select our mail forwarding service, we cannot accept mail on your behalf and will be required to return it to the sender.  If you are interested in our mail forwarding service, please send us an e-mail at delcorp@delcorp.com and we will provide you with a description of our service and the cost of each service. A USPS form must be completed and returned to us before we may legally accept mail forwarding. Under no circumstances will we accept your mail at our street address.

I already operate a business, can I now incorporate it?

Yes.  In our Delaware Corporate Agents, Inc. Forms, we have included all forms necessary for you to convert your partnership or sole proprietorship to a corporation or LLC.

Are the shareholders/members ever liable for the company's debts?

Yes, sometimes. The Delaware courts have permitted creditors to “pierce the corporate veil” to hold shareholders or members liable for their company’s debts when:

  1. They do not meet the minimum standards for operation of a corporation or LLC, such as not having annual meetings of shareholders and directors or members and not maintaining minutes of those meetings;
  2. Co-mingling company and personal assets, such as paying personal debts from the company’s checkbook or not maintaining a company account; or
  3. Using the company for an illegal activity or conducting business in a fraudulent manner.

Additionally, shareholders/members may be liable for debts which they assume or guarantee, as well as debts transferred to the corporation or LLC from a prior sole proprietorship or partnership. Any time that you are signing an agreement for your company, make sure that your office appears next to your name evidencing that you are acting in your company capacity and not in your individual capacity.