Step-by-Step Guide to File Delaware Franchise Tax

Published on:

February 6, 2025

As a Delaware-incorporated business owner, your annual franchise tax filing stands as one of your most important compliance requirements. While missing this deadline might seem like a minor oversight, it can lead to serious consequences - from hefty penalties to losing your company's good standing in Delaware.

In this guide, we’ll walk you through the DFT filing process, from gathering essential documents to successful submission.

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Prerequisites for Delaware Franchise Tax Filing

A successful DFT filing requires proper preparation of both documents and specialized tools. Having these ready before you begin will streamline your filing process significantly.

Essential Documents and Information

Company's Employer Identification Number (Optional)
Bank account statements - If you don’t have financials
Financial statements showing gross assets
Current business address and contact details
Corporate documents showing issued shares
Business bank account details for payment (including routing number)
Previous year's tax returns (if applicable)
Company file number from Delaware Division of Corporations

Required Tools and Access

Delaware Division of Corporations website (https://corp.delaware.gov)
Delaware Corporate Information System (https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx)

Step-by-Step Process to File Delaware Franchise Tax

Successfully filing your DFT requires careful attention to both automated and manual steps. Here's a detailed breakdown of the process using Inkle's tools and the state portal.

1. Document Your Issued Shares

The first step in filing your DFT is to accurately record your company's issued shares. This information forms the foundation for your tax calculation.

Verify the total number of authorized shares from your Certificate of Incorporation
Document any amendments that changed your authorized shares
Note the par value of shares if applicable
Ensure share information matches your corporate records
Gather documentation of stock issuances

2. Calculate Your Gross Assets (GA)

Your company's gross assets figure is crucial for proper tax calculation. Review your financial statements and bank records to determine this amount accurately.

Review all bank statements for the tax year
Sum all relevant transactions to determine total gross assets
Include all company accounts and financial instruments
Document any subsidiary investments
Finalize the gross asset figure for reporting

3. Determine the Date of Gross Assets

Establish the specific date for your gross asset calculation, typically December 31st of the tax year or your company's fiscal year-end date.

Confirm your company's fiscal year-end date
Verify the reporting period for your filing
Document the specific date used for asset calculations
Ensure all financial records align with this date
Use December 31st of the calendar year

4. Verify the Principal Place of Business

Confirm your company's current principal place of business to ensure all communications and legal notices are properly directed.

Verify the current street address
Confirm city, state, and zip code information
Update any changed information
Include your business phone number
Ensure contact information is current

5. Identify Principal Officers

Provide accurate information about your company's principal officers who are legally responsible for the business.

List current officers with their titles
Verify spellings of all names
Include officer contact information if required
Document any changes in leadership during the tax year
Confirm officer appointment dates if needed

6. Document Total Directors

Record the complete list of your company's board of directors as of the filing date.

List all current board members
Mention the board chairperson or president
Document any board changes during the tax year
Verify director appointment dates
Include contact information if required

7. Designate Authorized Signatory

Identify who is legally authorized to sign tax documents on behalf of your company.

Confirm the authorized signatory's name and title
Verify that the signatory has proper authorization
Document the signatory's contact information
Ensure the signatory understands the legal implications
Have backup signatories available if needed

8. Prepare Bank Details for Payment

The final step involves having your business banking information ready for payment submission.

Gather the business bank account name
Have routing number available
Prepare account number
Verify sufficient funds are available
Document payment contact information
Account holder address

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Conclusion

Filing your Delaware Franchise Tax doesn't have to be complicated when you follow these structured steps and utilize the right tools. While you can complete this process independently, professional assistance can save time and ensure accuracy.

Looking for a more streamlined approach to your Delaware Franchise Tax filing? Visit Inkle's DFT Filing Service to automate the process and ensure compliance with all Delaware requirements.

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Frequently Asked Questions

1. What is the deadline for filing Delaware Franchise Tax?

Delaware Franchise Tax must be filed by March 1st each year. Filing after this deadline results in penalties and interest charges. The tax covers the previous calendar year, and extensions are not typically granted.

2. How is Delaware Franchise Tax calculated?

Delaware Franchise Tax is calculated using one of two methods:

Authorized Shares Method - Based on the number of authorized shares
Assumed Par Value Capital Method - Based on gross assets and issued shares

The system automatically calculates using both methods and applies the lower amount.

3. What happens if I miss the DFT filing deadline?

Missing the DFT filing deadline has several consequences:

Monthly penalty of $200
Monthly interest charge of 1.5%
Loss of good standing status
Potential administrative dissolution of your company
Complications in future business transactions

4. Can I amend my Delaware Franchise Tax filing?

Yes, you can amend your filing if you discover errors. Contact the Delaware Division of Corporations directly to initiate an amendment. Keep in mind that:

Additional fees may apply
Supporting documentation is required
Processing time varies

5. Do I need to file if my business had no activity?

Yes, you must file Delaware Franchise Tax even if your business had no activity during the year. The tax is based on authorized shares or assumed par value, not business activity.

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