Starting an LLC in Delaware is not for the faint of heart. Maintaining one isn’t, either. There’s a bunch of annual requirements: annual taxes, business licenses to renew, and of course, annual reports. A lot of the annual requirements can be pretty complicated, too.
Annual reports can be pretty complicated…but only if you don’t know what to expect. That’s what we’re here for. In this guide, we’ll cover all the essentials to annual reports in Delaware: LLC filing fees, where to file, due dates, and if you want, where to go to get help filing. By the end, the annual report won’t feel so daunting anymore.
What is an annual report?
An annual report is a lot like an annual newsletter for your LLC—except you only send it to one place: the state government. Each year, the state needs updated information about your business. And this isn’t a requirement that’s unique to Delaware. In fact, nearly every state requires some form of annual (or similar timeline) update.
That said, the newsletter analogy falls short because you don’t need to tell the state what you did each month. You don’t even have to tell them the highs and lows of your year. And thankfully, you don’t have to write it out as a letter. All you’ll have to do is fill out the requested information.
Here’s a quick glance at the information Delaware will require from you:
- Name of person filing the form
- Email address
- Phone number of person filing the form
- Credit/debit card information
Sound overwhelming? Don’t panic. It’s actually a lot easier than you might think! In the rest of this guide, we’ll cover all the essentials to annual reporting—including a DIY approach and how to get help if you’d rather not file on your own.
Where do I start?
If you Google “Delaware annual report,” you might be confused when you don’t find a clear result for it. Odds are you’ll be directed to Delaware’s Annual Franchise Tax report instead.
That’s the thing: Delaware’s Annual Franchise Tax is their annual report—at least for LLCs. Delaware requires annual reports for other entity types, but as an LLC, you’ll only file the Franchise Tax and its accompanying form. Delaware keeps this process entirely online.
The annual franchise report isn’t extremely difficult to fill out, honestly. But if you’re extremely busy (and who isn’t these days?), the report can seem overwhelming—it’s yet another thing you have to do. That said, you can hire a Delaware LLC Service to handle the work for you. Not only will these services actually form your business for you (if you need it), but they’ll also help you handle annual requirements like the annual report.
How much does Delaware’s Annual Franchise Tax Report cost?
Some states have a pretty hefty price tag of several hundred dollars for their annual report. Other states charge more reasonable fees of less than $100. Delaware, however, has one of the heftier annual fees: $300. This is in addition to the other annual taxes you’ll have to pay. No matter what your business income is, you’ll pay the $300 fee each year.
Since you file the taxes online (and the accompanying form), you should pay using a credit or debit card. For more information on this tax, check out the Annual Report and Tax Instructions page.
When is the Annual Franchise Tax Report due?
In most states, the annual report is due, well, annually. In other states, entrepreneurs often refer to it as an annual report even though it’s due every other year. In Delaware, the Annual Franchise Tax Report is just as it sounds: you’ll file every year.
Delaware maintains the same due date for all LLCs: June 1. It doesn’t matter when you filed your formation documents; you’ll file by June 1 (or run into trouble). If you don’t file on time, Delaware will hit your business with a $200 late fee (plus 1.5% extra for each additional month it’s late).
What happens if you don’t file your annual report?
Sometimes annual check-ins are a pain, right? And we get it: with some things, like annual physicals, dental cleanings, and eye appointments are tempting to skip. Usually, there isn’t a big penalty if you skip them for a year or two (aside from a minor scolding from your doctor).
However, that isn’t the case with annual reports. You should never skip filing your annual report, and you should always do it on time. For one thing, filing on time ensures that you don’t spend any more than you have to.
More importantly, though, failing to file your annual report can cost you your good standing in the state. If your report is delinquent, you might run into trouble with certain business tasks, such as expanding to other states, certain financial transactions, and more.
In extreme cases, the state will dissolve your LLC. Long story short, they’ll shut down your business by force. If that happens, don’t panic; you can get reinstated. But it’s a hassle to do so, so we highly recommend filing on time each year. You’ll save yourself a lot of time and money.
Maintaining a Delaware LLC is no laughing matter, and the annual report is without a doubt one of the most important annual filings. Thankfully, it doesn’t have to be too complicated. Hopefully this guide has helped take out some of the guesswork. And don’t forget: an LLC Service can make things even easier.