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How to Pay Annual Delaware LLC Fees

Learn how to properly pay your annual fees for your Delaware LLC with this guide.

September 20, 2021
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Limited liability companies are a popular structure for businesses. This is because the process to establish an LLC is simple and offers several advantages.

An LLC can provide you with more tax options compared to other business structures. It has a simple default tax structure where you can report profits or losses on your personal tax returns. It can also protect your personal and gross assets while boosting your brand’s return on investment.

If you’re planning on creating an LLC in Delaware, you’ll need to learn the important fees associated with the process. Read on to know more about establishing an LLC in the state and the payments you need to make with an LLC.

How to Establish an LLC in Delaware?

Forming an LLC can be a challenging task to accomplish. But, with the right resources, you can have the confidence to breeze through the process. Below is a step-by-step guide on how to establish an LLC in Delaware. 

  1. Choose a Name for Your LLC

Deciding on a company name is your first step in forming an LLC. You have to use a unique name that meets Delaware naming requirements.

When choosing a name, it’s required to have the phrase “limited liability company” or “LLC” in your company name. You’re also not allowed to include words that suggest affiliation with a government agency.

Once you’ve thought of a name for your business, check if the name is available in the state. Make sure that the name isn’t used by another Delaware company. 

You can also use naming tools online to help you come up with unique business names.

  1. Select a Registered Agent

Before filing a Certificate of Formation, you'll need to have a registered agent. 

The agent accepts legal documents, including service of process and tax notices. Your agent can be a person or a registered agent service. 

  1. File a Certificate of Formation

The third step in forming an LLC is filing a Certificate of Formation with the Delaware Department of State. You can do this step online or you can do this by mail. 

During this step, you have to decide whether your company will be member-managed or manager-managed.

  1. Create an Operating Agreement

After filing the Certificate of Formation, you need to write up an operating agreement. This is a legal document outlining the following:

  • How your LLC employs new members
  • Each of the member’s responsibilities and duties
  • How members terminate their membership
  • How members transfer their membership
  • The distribution process of dividends
  • How capital calls are made

You can adjust provisions to your LLC operating agreement. But, keep in mind not to include provisions that may conflict with Delaware law.

  1. Secure an Employer Identification Number

After making an operating agreement, you can finally get an Employer Identification Number (EIN). An EIN functions as a Social Security number for businesses. 

It helps the US Internal Revenue Service (IRS) to identify and tax companies. You can apply to get an EIN with the IRS.

What Are the Annual Delaware LLC Fees?

If you’re doing business in Delaware, you’re required to pay the Delaware Franchise Tax and the registered agent fee.

Delaware Franchise Tax 

The Delaware Franchise Tax costs $300 per year. This tax is paid annually on June 1. 

Regardless of a company’s age, gross sales, or activity, the $300 is a standard cost. If you can’t pay the Delaware Franchise Tax on time, you need to pay a $200 penalty. 

The state has a zero-tolerance policy for late payments. The $200 penalty fee will be automatically added to your tax, regardless of the reason why you didn’t pay on time.

Registered Agent's Annual Fee

You need a registered agent for legal purposes to support your LLC. An agent helps you in such things as service of process, state correspondence, and tax notifications.

Having the services of a Delaware registered agent means that their annual fee is part of your annual compliance cost.


How to Pay Annual Delaware LLC Fees?


As an LLC business owner, you need to pay your annual Delaware Franchise Tax. Every February, the state will send your registered agent a reminder to pay the annual franchise tax. 

But, it’s recommended to create your own reminder in your personal calendar. This way, even if you don’t receive the reminder from the state, you won’t forget to pay. 

Remember, it’s your responsibility to pay the Delaware Franchise Tax every year. You need to be able to pay even without notice from the state.

You can only pay the annual report fee online. You can use a credit card or your checking account to pay.

Paying Delaware Franchise Tax

Below is a step-by-step guide on how to pay your Delaware Franchise Tax.

  1. Visit the state of Delaware website and fill out the online filing system:

https://icis.corp.delaware.gov/Ecorp/logintax.aspx?FilingType=FranchiseTax

  1. Provide your LLC’s File Number.
  2. Read and review the franchise tax report. The website will show if you have to pay late fees. Click the “Pay Taxes” button.
  3. Click on “Pay Full Amount.”
  4. Select the drop-down option on the “Payment Type” section. Choose your franchise tax payment option. You can pay with your checking account or use a credit card.
  5. Fill out the form and provide your name, billing information, phone, and email. 
  6. Click the “Submit” button.

After following these steps, you will receive an email confirmation from the state. The email will notify you that you’ve paid your franchise tax fee successfully. 

It’s recommended to print the email and keep it with your important business records.

Difference of LLC and Corporation in Delaware

Governance Structure

A corporation is led by three tiers of power: shareholders, directors, and officers.

Meanwhile, an LLC is formed with an operating agreement contract between all the members.

Federal Taxation

Domestic corporations and foreign corporations have three taxation options:

  • Pay annual taxes through yearly profits

  • Shareholders pay the taxes through their pro-rata share of the company

  • Be a non-profit and have a tax-exempt status

In contrast, tax classification for an LLC is gained by filing an application for an EIN. The EIN enables the IRS to identify and tax LLCs.

Privacy

For corporations, annual reports must include the name and physical address of all the directors, officers, and principal place of business.

In contrast, the state of Delaware doesn’t require the personal names and addresses of the members of an LLC in the annual report filing.

There is so much to think when starting a business in Delaware, including the fees to pay. Don’t miss a thing with the help of StartPack! Call us now to learn the ways we can assist you on how to pay your annual Delaware LLC fees.

Pro Tip:

Pay your franchise tax early to avoid any late fees. Visit Startpack now and file important legal documents on time!

How Can Startpack Help You to Pay Your Annual Delaware LLC Fees?

Are you set on creating your own LLC in Delaware? Contact Startpack today and make your new LLC compliant with Delaware laws.

Startpack can guide you through the various processes involving important paperwork for your business license. We can provide everything you need to file the legal paperwork required for your company.

We can help you stay compliant with Delaware law by sending compliance reminders. This way, you’ll have an LLC that stays legal year over year.

FAQs About Annual Delaware LLC Fees

How much is the Delaware LLC tax late fee?

You need to pay a late fee of $200 if you didn’t pay the $300 Delaware Franchise Tax by the due date of June 1st. 

What type of return should a single-member LLC “disregarded entity” file with Delaware?

In Delaware, a single-member disregarded entity is noted as a sole proprietorship for tax purposes. This means that the LLC itself doesn’t pay taxes. The company is also not required to file a return with the state.

What is a multi-member Limited Liability Company (LLC)?

A multi-member LLC (MMLLC) has two or more members. Much like a single-member LLC, an MMLLC is a business entity that combines the flexibility of general partnerships and the limited liability of corporations.

About the author

Arjun Mahadevan

Co-Founder and CEO at StartPack

Arjun is into helping founders turn their dream idea into a profitable business. Arjun is into health & fitness đź’Ş and tech đź’»

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