How to File an Annual Report in Delaware

Learn how to successfully file your Delaware annual report with Business Globalizer. Get the help you need to streamline the process and ensure compliance.
Annual Report Delaware

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Are you a non-resident LLC owner in Delaware? Or a corporation owner? Well. If you belong to any of these and you are facing a problem filing an annual report in Delaware, then this blog is for you. 

It is no secret that Delaware offers countless benefits to those who incorporate here for business purposes. You must regard Delaware state law to grab all the benefits and grow your business smoothly. Filing annual reports in Delaware is one of them. For your help, we will guide you on how to file your annual report and franchise tax.

What Is the Delaware SOS Annual Report?

Delaware’s annual report or Delaware SOS annual report indicates the yearly annual report published by the Secretary of State’s office. To run a business smoothly and have a good standing with the Delaware state laws, every domestic or foreign company should file an annual report for their company. 

Suppose you want to know the formal definition. In that case, we can say an annual report is a document that includes information about the company’s activities, performance, financial conditions, revenue, assets, stock, and paid-in capital. Also, if you change your company address, ownership, officers, and registered agent, you should submit that information in your annual report.

The annual report must be submitted after the incorporation of your company. You can send this report to the Division of Corporations online and pay the franchise tax simultaneously. The purpose of annual reports is to keep shareholders, employees, and the community informed regarding the company’s financial health.

Why Is Filing Annual Report in Delaware Important?

Annual reports are required by statute in nearly every state, including Delaware. An annual report aims to provide stakeholders, such as shareholders, the public, investors, employees, the filing office, and other government agencies, with a clear and concise overview of a company’s performance and operations over the past year. 

There are some reasons behind the necessity of an annual report. We are going to include them below. After analyzing our list, you will understand why an annual report is necessary for every business. 

  • Company History and Background: This section briefly describes the company and its products or services.

  • Providing Financial Information: Annual reports typically include financial statements, such as the balance sheet, income statement, and cash flow statement, which provide detailed information on a company’s financial performance over the past year.

  • Compliance with State Laws: Annual report filing is necessary to maintain good standing with the Delaware state laws and continue operating your business smoothly.

  • Attract New Investors: We know that annual reports contain crucial information about the company, and they become available to a large external audience, including shareholders, potential investors, employees, and customers. When the investors go through your company’s annual report, they better understand the company values to collaborate with your company.

  • Communicating Business Operations: An annual report can give stakeholders a clear concept of how a company does business, including details about its goods or services, customers, and market position.

  • Retain the Confidence of Current Stakeholders: After reviewing your annual report, the stakeholders regain their confidence in your company and invest more in your business.

  • Highlighting Key Initiatives and Developments: An annual report can highlight any major initiatives or developments a company has undertaken over the past year, such as new product launches into new markets.

  • Provide Information on Corporate Governance: A company’s annual report can provide information on its board of directors, executive team, and corporate governance practices. And it ensures that your company is run responsibly and transparently.

  • Access to Business Advantages: Delaware provides various benefits to businesses. By filing the annual report, you can take advantage of these benefits.

  • Outlining the Future: An annual report can outline the company’s plans for the future, like the company’s major goals.

  • Avoid Penalties: If you fail to submit your annual report, your business may lose its corporate designation and the tax advantages of that designation. So, to avoid penalties, you should file your annual report regularly. 

What Information Should Be Contained in an Annual Report?

Do you want to make an accurate annual report with no mistakes? Then you should give the details and correct information. We will guide you on what information you should put on your report. The Delaware Corporation’s annual report form should include some crucial data. 

  • Your company’s legal name.

  • Your business structure. 

  • Total authorized share number.

  • Ownership information.

  • Information about the registered agent.

  • Analysis of franchise taxes and fees.

  • Authorized phone number.

  • The physical address of your company.

  • Names and home addresses of all the directors.

  • Name and home address of an officer.

  • Information about the investors.

  • Signature of a legally authorized signatory.

  • Your company’s economic status, key events, activities, and achievements are highlighted.

  •  Details regarding new services, future needs, wants, goals, and the company’s desired direction.

  • Your company’s financial breakdown, includes balance sheet summaries, a cash flow statement, capital investment data, an auditor’s report, anticipated revenues and expenses, an income statement, and other profit and loss details.

  • A restatement of the company’s core values, mission statement, and future objectives.

Standard Delaware Annual Report Compliance Filing 

It refers to the requirement for Delaware business entities to file an annual report. To file a standard annual report with the Delaware Secretary of State’s office, you have to count all the necessary requirements according to your business structure. For every business type, the requirements can be different. 

For example, Delaware LLC’s reporting requirements differ slightly from the C Corporation. Delaware LLC doesn’t disclose detailed financial statements. On the other hand, a c corp must put all the detailed information about their financial performance. That’s why we will tell you the important terms you should consider while making an annual report. 

  • Agency: The annual report should be submitted to the Delaware Secretary of State’s office for every business type. In Delaware, it’s a state regulation for every business corporation to submit their annual report.

  • Registered Agent: A registered agent is necessary for every foreign company in Delaware. To handle all your company documents, you must obtain a registered agent.

  • Filing Method: The filing method can be different for some business types. Most Delaware companies file their annual report online or by mail. But sometimes, you must file your report by visiting the Delaware Secretary of State’s office. In this situation, a registered agent can help you by filing an important document on behalf of your company.

  • Filing Fee: The filing fee for each business structure is different. The fee could vary due to company size and company type. The fee schedule is on the Delaware Secretary of State’s website.

  • Franchise Tax: The franchise tax is also different for different business types. You have to calculate the franchise tax carefully before filing.

  • Due Date: The filing deadline for annual reports differs for LLCs and Corporations. Also, the date can be changed over time.

  • Penalties: Mostly, the penalties for filing late the annual report can be similar among Delaware domestic. But for foreign companies, the penalties could be less.

  • Required Information: In every type of business, the required information is the same. However, the formalities could be excessive for corporations.

How to File an Annual Report in Delaware? 

Although the filing process for the several types of business is the same, in some cases, annual report filing could be different. Delaware C Corp annual report differs slightly from the LLC annual report.

 Also, sole proprietorships in Delaware usually do not file annual reports. LLCs, corporations, and LPSs are mostly required to file annual reports. Now we will describe some steps about how you will make your annual report. 

  • Analyze Your State Requirements: Be aware of your state requirements, including the deadline for filing, filing fees, and other crucial information about your business.

  • Gather Information: At first, gather all the information you will need to complete your annual report, including business information, file number, address of your business, information about your registered agent, your stakeholder’s information, etc.

  • Visit the Delaware Division of Corporations Website:  All Delaware corporations can file their annual report on the state’s Division of Corporations Website. This website provides the necessary forms for filling. Also, you can get all the instructions about the annual report on the website. Submitting the Secretary of State Delaware annual report is hassle-free for a non-resident.

  • Necessary Forms: On the website, there are several forms available. For example, form 1040 is for a sole proprietorship. There are different forms of LLCs, sole proprietorships, and corporations.

  • Find Your Report on the Website: After entering the website, you can log in to your registered agent account or create a new account to submit your report online. After logging in to your account, you can go to the annual report section. Search your report by your business file number.

  • Fill up the Report Information: Now complete your annual report form with all the crucial information about your company. Make sure that you double-check your report before submitting it.

  • Pay Your Filing Fee: The filing fee differs for different business entities. Be sure about your required fee before paying. Because if you fail to pay your accurate fee, you can get penalties for that.

  • Submit Your Report:  After completing your report, please have a clear review of your report so there is no mistake. Then submit the report electronically. After submitting, keep a record copy of your annual report for further requirements.

  • File Your Franchise Tax: All left is to pay the required franchise tax. For corporations and LLCs, the franchise tax is required to pay regularly. On the other hand, Sole proprietorships and LPSs are not always required to file a franchise tax. Calculating the franchise tax could be complicated for some people. To ease with that, we are going to describe that later.

What Is an Annual Franchise Tax?

The franchise tax is a crucial part of the annual report in Delaware. Domestic or foreign companies must pay their franchise tax while submitting the annual report. 

A franchise tax is a fee companies pay to be registered or organized in the state. A registered business entity gains personal liability protection, certain tax deductions, business name protection, and other benefits. In exchange for these benefits, the state serves a tax, which is managed via the annual franchise tax report. 

For corporations, the due date is March 1st of each year, and for LLCs, the due date is June 1st. Remember, the date could change. So, be sure about the due date before paying your tax

How to File Delaware Franchise Tax?

Paying the required franchise tax is mandatory to comply with state laws. To have a basic concept of how you can file your tax, you can go through the below instructions. 

  • Filing Method: You can submit your franchise tax online, by mail, or with the help of your registered agent. The best choice will be our Business Globalizer because after handling your responsibility to us, you never have to worry about your tax payments.

  • Necessary Information: Gather all the information you will need to fill out the form for franchise tax.

  • Visit the Delaware Division of Corporations Website: Visit the website and access your form to fill in your business information.

  • Calculate the Franchise Tax: You can calculate your tax via the Authorized shares method and the Assumed par capital value method. You can consult a tax professional like Business Globalizer for an accurate calculation.

  • Pay Your Tax: After completing the form, you can pay your due tax electronically. Then submit your tax filing and collect a record copy.

Filing your annual franchise tax could be tricky for you because the calculations are complex to understand. In that situation, you can get help from a professional taxpayer like Business Globalizer

How Will Business Globalizer Help You?

Business Globalizer provides all the necessary services for a company to form a business in Delaware. While filing an annual report, you will need some criteria to complete, and we can complete that task on behalf of your company. We can offer:

  • A registered agent.
  • Information collecting for filing your report.
  • Basic tax consultation.
  • Submission before the deadline.
  • A suitable payment gateway.

You can understand by reading the upper discussion that submitting the annual report and paying the franchise tax is a complex task for a busy business owner. If you are a non-resident, it would be more complex for you because the US rules and regulations can be challenging for you. That’s why choosing us would be a clever idea for your company. 

FAQs on How to File an Annual Report in Delaware

Q1: When is the Delaware annual report due? 

Answer: You should know that the filing date could differ for different business entities. In Delaware, Domestic corporations must file their annual reports by  March 1st, with all filing fees and franchising taxes. And for foreign corporations and LLCs, the due date is before the 1st of each year, with all filing fees and franchising taxes. The deadline for domestic and foreign LLCs is before June 1st each year.

The due date could change by the state. So, to avoid penalties for filing late, always be aware of the dates.

Q2: Do I get penalties for missing the due date?

Answer: Always submit your annual report properly to maintain a good impression of the state laws. Because if you fail to do so, you can get penalties and lose several business benefits from the state. You can get $200 penalties for missing the deadline with 1.5% monthly interest. The penalty could vary according to your company shares. 

Q3: Can I file the annual report online?

Answer: Yes, obviously. It is a common and often preferred option by foreign and domestic companies. Also, If you file Delaware Corporation online, it will be favorable for you as a non-resident. You don’t have to visit the state office physically. 

Bottomline

An annual report and franchise tax filing are not only for following the laws of Delaware state but could also bring you several advantages like grants, investors, etc. And evaluating your annual report in Delaware, people will analyze your business motives and strengths. As a result, they will willingly invest in your business. 

So, to not miss this opportunity to grow your business, never miss the deadline for filing your annual support. 

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