Tax and accounting regulations

Delaware has 0% corporate income tax rates for companies not operating within the state, though all Delaware corporations must pay an annual corporate franchise tax.

What are the annual costs associated with a Delaware LLC?

Annual Report

Limited Liability Companies and Limited Partnerships formed in the State of Delaware are not required to file an Annual Report; however, they are required to pay an annual tax based on a flat rate of $250.00.

Taxes for these entities are to be paid no later than June the 1st of each year.

It is important to remember to pay the tax on time because Delaware will assess a Penalty for non-payment or late payment of $200.00. In addition, Interest accrues on the tax and penalty at the rate of 1.5% per month.

Non-stock for profit

All non-stock, for profit entities that do not comply with the Exempt Corporation requirements will be required to pay a Franchise Tax of $175.00

Authorised shares method

For corporations having no par value stock the authorised shares method will always result in the lesser tax.

  • 5,000 shares or less (minimum tax) $175.00.
  • 5,001 – 10,000 shares – $250.00,
  • Each additional 10,000 shares or portion thereof add $75.00
  • Maximum annual tax is $180,000.00

For example:

A corporation with 10,005 shares authorised pays $325.00($250.00 plus $75.00).

A corporation with 100,000 shares authorised pays $925.00($250.00 plus $675.00[$75.00 x 9]).

Does my Delaware LLC have to request an EIN from the IRS?

An LLC run as a one member LLC can either use the Social Security Number (SSN) of the single owner to conduct business, or it can obtain a separate Employer Identification Number (EIN). An EIN is also required for an LLC if it is a multimember LLC.

We recommend that you obtain an EIN number soon after the formation of your LLC.

If you are not a citizen of the United States or Resident Alien and you form a one member LLC and don’t do any business effectively connected with the United States, which includes not having a U.S. bank account, you will not have to get an Employer Identification Number (EIN) for your Delaware LLC or file any US or State income tax returns. If you have a company that has more than $10,000 total in accounts outside the U.S., you will need to complete the one-page IRS Form TD F 90-22.1 also known as FBAR reporting (Foreign bank and financial accounts).