After forming a company in the US, you will become responsible for the State Franchise Tax annually. Franchise Tax is a fee that is a compulsory requirement given by the state of Delaware for the right or privilege to own a Delaware company. The tax has no bearing on income or company activity; it is required by the state of Delaware to continue the permanent functional status of your company. The term “Franchise Tax” does not imply that your company is a franchise business.
The due date of your tax changes depending on the type of your company. The Franchise Tax for a corporation is due by March 1 of every year. If the tax is not paid till March 1, the state imposes a 200 USD as a late penalty, plus a monthly benefit fee of 1.5 percent. The Franchise Tax for a Delaware LLC is due by June 1 of every year. The limited partnership (LP) Franchise Tax is due by June 1 of every year. If the tax is not paid on or before June 1, the state imposes a $200 late punishment, plus a monthly interest fee of 1.5 percent. Corporations, LLCs and LPs are taxed in arrears, meaning the tax due by each due date is for the previous calendar year. You will also need to have a Registered Agent annually. A registered agent is a liable third-party that is located in the same state in which a business presence was established and who is assigned to receive service of process notices, relevance from the Secretary of State, and other official state notifications, generally tax forms and attention of lawsuits, on behalf of the corporation or LLC.
If you do not have a physical location in the state where your business is registered, in most states, you must select a registered agent to accept documents on your behalf. The state in which your work is recorded needs to know it has a contact individual for your business during working hours; therefore, PO boxes are not suitable addresses for registered agents.
A registered agent accepts tax and legal papers on behalf of your business, making sure you don’t miss crucial information regarding tax payments, cases, or decisions involving your business. A registered agent may or may not have a role in the processing of the market itself.
