I am not a Franchise why do I owe Franchise Tax?

I haven’t started doing business yet do I still have to file a report and pay taxes?

I am going out of business or my business is closed do I still owe taxes?

What if I don’t have Federal ID #?

Where do I get my total gross assets?

Where are my notices sent and how do I get a duplicate?

Do I have to list all of my officers and directors? Which officer do I have to list?

What is a PDF? How would I attach one?

Who is authorized to file the report?

What is a session ID?

Why are there penalties and/or interest on my account?

My company has a credit how can I request a refund?

 

I am not a Franchise why do I owe Franchise Tax?

Title 8 Chapter 5 § 501 of the Delaware code requires that every corporation now existing or hereafter to be incorporated under the laws of this State, shall pay an annual tax, for the use of the State, by way of license for the corporate franchise as prescribed in this chapter.

I haven’t started doing business yet do I still have to file a report and pay taxes?

Title 8 Chapter 5 § 503 states that all corporations accepting the provisions of the Constitution of this State and coming under Chapter 1 of this title, and all corporations which have heretofore filed or may hereafter file a certificate of incorporation under said chapter, shall pay to the Secretary of State as an annual franchise tax whichever of the applicable amounts as prescribed by Title 8 Chapter 5 § 503 (1) and (2).

I am going out of business or my business is closed do I still owe taxes?

Taxes continue to accrue on a corporation until a legal document filing is received and filed with the State of Delaware. The document needs to officially terminate the existence of the corporation in the State of Delaware. (i.e. Certificate of Dissolution, Certificate of Merger, etc…)

What if I don’t have Federal ID #?

You may file your annual report and pay taxes without having a Federal ID#. This number is assigned by the Internal Revenue Service. If you need to obtain a Federal ID# for your entity, please visit the IRS web site at www.irs.gov.

 Where do I get my total gross assets?

Title 8 Chapter 5 § 503 (i) states such total assets and total gross assets shall be those "total assets" reported to the United States on U.S. Form 1120 Schedule L, relative to the company's fiscal year ending in the calendar year prior to filing with the Secretary of State pursuant to this section. If such schedule is no longer in use, the Secretary of State shall designate a replacement. The Secretary of State may at any time require a true and correct copy of such schedule to be filed with the Secretary of State's office.

No corporation shall consolidate with its assets the assets of another entity for purposes of this section. If such schedule or its replacement reports on a consolidated basis, the reporting corporation shall submit to the Secretary of State a reconciliation of its reported total assets or total gross assets to the consolidated total assets reported on the schedule.

Where are my notices sent and how do I get a duplicate?

All Tax Notices are printed in December of the year that tax is due and sent to the Registered Agent. The Registered Agent is designated by the corporation through the initial formation or a filing submitted by the corporation that designates another Delaware Registered Agent. Please contact your Delaware Registered Agent if you require another copy of your notice.

Do I have to list all of my officers and directors? Which officer do I have to list?

Title 8 Chapter 5 § 502(a)(4) states that the Annual Report shall list "The names and addresses of all the directors as of the filing date of the report and the name and address of the officer who signs the report;"

 

What is a PDF? How would I attach one?

A Portable Document Format (PDF) is a file that will look the same on the screen and in print, regardless of what kind of computer or printer someone is using and regardless of what software package was originally used to create it. A PDF document will have a file ending of documentname.pdf You will need specific software to create a PDF. PDF files are the only files that can be attached to your annual report. You can attach a PDF to your annual report when you are supplying your director information. You may attach a PDF or complete the director information manually on the web page. You are still required to put the total number of Directors listed in your PDF on the web site. To attach a PDF you will go to the browse button that is located next to the Attach Directors’ Names in PDF format section of the web site. This will bring up a Choose File screen where you will select the document from the area of your pc in which your PDF is located. Once you click on the required file you will select Open and the location of the PDF to be attached will show up in the Director Information when reviewing as “You have attached a PDF: ”

Who is authorized to file the report?

Title 8 Chapter 5 § 502 (a) states that the report shall be made on a form designated by the Secretary of State and shall be signed by the corporation's president, secretary, treasurer or other proper officer duly authorized so to act, or by any of its directors, or by any incorporator in the event its board of directors shall not have been elected.

What is a session ID?

A session ID is assigned if you wish to continue filing your annual report at a later time. You may save your session by selecting “Save Session and Exit” at anytime during your filing. Once a Session ID is saved, both Session ID and file number are needed to sign on to this session again. The Session ID will be valid for a time period of two weeks. When a Session ID is saved, the Annual Report is not considered filed. The Annual Report is considered filed once you select the “Submit Filing” button and the payment is received. An acknowledgement copy is then able to be viewed immediately or you may have a copy emailed to you.

Why are there penalties and/or interest on my account?

Title 8 Chapter 5 § 502 (c) states that a penalty of $125.00 is assessed for failure to file the Annual Franchise Tax report by March 1st. Title 8 Chapter 5 § 504 (c) states if the tax of any corporation remains unpaid after the due dates established by this section, the tax shall bear interest at the rate of 1.5 percent for each month or portion thereof until fully paid.

My company has a credit how can I request a refund?

All refund requests should be sent on Company letterhead and signed by the authorized person listed on the Annual Franchise Tax Report. Request should be mailed to: Division of Corporations - 401 Federal Street - Suite 4 - Dover, DE 19901; attention Franchise Tax.