Keeping your corporation in good standing with the state of Delaware is a key element of managing your business. Plus, we've said it before - corporate compliance saves you time and money!
Today we're going to walk you through the three easy ways to keep your corporation in good standing.
Make sure your registered agent always has your correct contact information.
Your Delaware registered agent is required to accept and forward the Annual Report Tax Notices and any other official documentation from the Secretary of State to the entity contact. Registered agents are also required to accept and forward Services of Process.
If your address is not correct, you may miss these notices. If you miss these notices, you may fail to file your annual report or pay your taxes on time. You may miss the notice of your annual fee from your registered agent (causing them to resign - here's what to do if your registered agent resigns).
We'll discuss these further below but the takeaway here is that your registered agent needs your correct mailing address at all times.
File your annual report and pay your taxes to the state of Delaware on time.
Delaware corporate for-profit and non-profit franchise tax and annual report filings are always due on or before March 1, every year. Go ahead, add a reminder to your calendar right now because this is a date you don't want to miss.
Delaware annual franchise report filing and tax fees are currently $225.00 for those corporations with less than 5,000 shares of authorized stock, adjusting upward for those corporations with a higher stock authorization.
For a corporation paying the minimum tax, the day after the tax deadline, that amount doubles to $450.00, and the interest clock starts ticking.
Yes, in just one day, non-compliance costs your company twice as much. Interest starts accruing at 1.5% a month on that unpaid tax balance, and can quickly spiral into a much larger debt.
Pay the annual fee to your registered agent on time.
Every registered agent in the state of Delaware charges an annual fee. The Incorporators Ltd. charges an annual registered agent fee of $99 per year though many companies charge upwards of $200.
Failure to pay the annual fee means that your registered agent could resign. Once your registered agent resigns, you have 30 days to designate a new registered agent before your corporate charter is revoked.
Once that happens, you'll have to file a renewal or revival to get back in good standing. The cost of a renewal can average anywhere from $800.00 to $1,500.00, depending on the taxes due, the penalties incurred, and the interest accrued.
With these three tips in mind, we'd encourage you to select one member of your organization to be responsible for corporate compliance. Make sure your registered agent has the contact information for that individual.
These tips alone won't guarantee that your corporation will remain in good standing but for most companies, this is all you need to do.
If you have any questions or need assistance getting your company back in to good standing, feel free to contact us or call us at 800-223-3928.
DISCLAIMER: The Incorporators LTD. is a business formation service company only.
All content on this site is for informational purposes only and should not be construed as legal, taxation or financial advice or services.