If you miss the filing or payment deadline for the Delaware franchise tax (and, if applicable, the annual report), here is what you need to know:
✅ What is due when
- Corporations incorporated in Delaware must file their annual report and pay franchise tax by March 1
- LLCs, LPs, and GPs in Delaware must pay their annual tax by June 1 each year.
🚨 Consequences of missing the payment or filing date
If you do not meet the deadline, Delaware law provides for several negative consequences:
- A late penalty of $200 is imposed for both corporations and alternative entities (LLCs/LPs/GPs) if the tax is unpaid or the annual report is not filed.
- Interest accrues at 1.5% per month on the unpaid tax balance and on the penalty.
- The entity loses its “good standing” with the state. For example, for an LLC/LP/GP the result is that the entity “will no longer be in good standing in Delaware.”
- For corporations, if you fail to file the annual report or pay the tax for more than one year, the entity’s charter may be declared void.
- For LLCs/LPs/GPs, after remaining unpaid for multiple years, the entity may be administratively canceled.
- Even after you pay up, the record of the delinquency remains — it may show up in public searches and may affect investor/lender perception.
🧮 Practical implications
- Because you lose “good standing,” the entity may not be able to obtain a Certificate of Good Standing, which is often needed for financing, for doing business in other states (foreign qualification), or corporate transactions.
- If the charter is voided (for a corporation) or the entity is canceled (for LLC/LP/GP), you may need to go through reinstatement or revival procedures — which means extra fees, catching up past due taxes, filing reports, etc.
- The penalties and interest grow over time — so the sooner you act, the less costly it will be in terms of extra monetary burden.
🔍 What you should do if you missed the deadline
- Log into the portal of the Delaware Division of Corporations to check exactly what’s owed — original tax + penalty + accumulated interest.
- Pay the full amount as soon as possible to stop further interest accrual.
- File the missing report (if applicable) — for corporations the annual report is required in addition to the tax.
- After payment and filing, confirm that your entity status is restored to “good standing” (or take steps for reinstatement if void/cancelled).
- Consider setting reminders or using a professional registered agent or compliance service to avoid future issues.
