Delaware franchise tax for startups: how to pay $400, not $85,000

A Delaware C corporation owes franchise tax and a $50 annual report by March 1 each year. The default bill charges a startup with 10,000,000 authorized shares $85,165. Filing with the Assumed Par Value Capital method usually brings it down to the $400 minimum.

Updated November 5, 2026 · 4 min read · By the Accountable team

The assumed par method cuts the tax to $800, not $85,165

Delaware's default notice

$85,165

Only counts 10,000,000 authorized shares
Not linked to your company's size

Assumed par, in Accountable

$800

Gross assets from your Dec 31 books
Both methods side by side
Enter it in the annual report

Tax before the $50 annual report fee, from Delaware's published rates checked Sep 30, 2026. Assumes 10,000,000 authorized shares at $0.00001 par, 8,000,000 issued and $1,000,000 of gross assets. With $500,000 of gross assets it is the $400 minimum.

The short version

Every Delaware corporation files an annual report and pays franchise tax by March 1; the report fee is $50.
The Authorized Shares method costs $175 for 5,000 shares or less, but $85,165 for the 10,000,000 shares most startups authorize.
The Assumed Par Value Capital method starts at $400 and uses your total gross assets and issued shares at December 31.
Delaware charges whichever method you file under, so you choose the lower one by entering gross assets and issued shares in the annual report.
Filing late costs a $200 penalty plus 1.5% interest a month on the tax and penalty.

Delaware's default notice bills startups tens of thousands

Delaware sends every corporation a notice computed with the Authorized Shares method, because it is the only method Delaware can compute without your numbers. It charges by how many shares your charter authorizes, not by how big your company is.

Startups usually authorize 10,000,000 shares or more at formation so they can issue founder stock and an option pool. Under this method that count alone produces a five-figure bill, even for a company with no revenue.

Authorized Shares method, from Delaware's published rates
Authorized shares	Franchise tax
5,000 or less	$175 (the minimum)
5,001 to 10,000	$250
Each further 10,000 or part of it	Add $85
10,000,000	$85,165
Maximum	$200,000

How the Assumed Par Value Capital method works

This method taxes the value your balance sheet supports. You need two numbers from December 31 of the tax year: total gross assets (everything on the balance sheet, the same figure as your federal return's Schedule L) and the number of shares issued.

Step 1: Divide total gross assets by issued shares. The result is the assumed par value per share.
Step 2: If the assumed par is higher than your stated par value, multiply it by your authorized shares. If it is lower, use the stated par value for those shares instead.
Step 3: The total is your assumed par value capital. Round it up to the next $1,000,000.
Step 4: Divide by $1,000,000 and multiply by $400. The minimum is $400 and the maximum is $200,000 ($250,000 for large corporate filers).

With the $50 report fee, this startup pays $850, not $85,215

1$0.125 a share$1,000,000 ÷ 8,000,000 issued
2$1,250,000 of capital× 10,000,000 authorized
3$2,000,000 roundedUp to the next million
4$850 due March 1$800 tax plus the $50 report

10,000,000 shares authorized at $0.00001 par, 8,000,000 issued, $1,000,000 of gross assets at December 31.

The math: $1,000,000 ÷ 8,000,000 = $0.125 a share, and 10,000,000 × $0.125 = $1,250,000, which rounds up to $2,000,000.

A company with under about $1,000,000 in gross assets and most of its authorized shares issued lands on the $400 minimum. The fewer shares you have issued compared with authorized, the higher this method runs, so check both methods each year.

What to file by March 1, step by step

Step 1: Close your books for December and pull total gross assets from the December 31 balance sheet.
Step 2: Count issued shares at December 31 from your cap table, including all founder and employee stock that has been issued.
Step 3: Sign in to Delaware's online annual report with your company's file number.
Step 4: Enter total gross assets and issued shares in the annual report. Delaware recalculates the tax with the Assumed Par Value Capital method.
Step 5: List your officers and at least one director, then pay the tax and the $50 fee.

A $10,000 tax splits into four payments, the last March 1

Before Jun 1, 2027Before Jun 1, 2027Accountable prices the tax both waysTax › Delaware franchise tax, from your shares and assets
Jun 1, 2027Jun 1, 2027Pay 40%: $4,000
Sep 1, 2027Sep 1, 2027Pay 20%: $2,000
Dec 1, 2027Dec 1, 2027Pay 20%: $2,000
Mar 1, 2028Mar 1, 2028Pay the last $2,000With the $50 annual report.

Example for the 2027 tax year. Delaware asks for estimated payments only when the tax is $5,000 or more.

If you owe $5,000 or more, Delaware wants estimated payments: 40% by June 1, 20% by September 1, 20% by December 1 and the rest by March 1.

Delaware LLCs pay a flat $400 by June 1

A Delaware LLC, LP or GP does not file an annual report. It pays a flat annual tax of $400 due June 1, with a $200 penalty and 1.5% monthly interest if it is late. The tax was $300 through the 2025 tax year; House Bill 400 raised it to $400 from the 2026 tax year, so the first $400 payment is due June 1, 2027. Founders who run a holding LLC and an operating C corporation owe both: $400 in June for the LLC and the franchise tax in March for the corporation.

A Delaware LLC owes $400; a C corp owes at least $225

Delaware LLC

$400 a year

One flat tax, due June 1
$400 from the 2026 tax year, up from $300
Nothing else to file

Delaware C corporation

$225 or more

Due March 1 with the annual report
Set by shares and gross assets

Delaware's LLC, LP and GP tax page lists $400, raised from $300 for the 2026 tax year, checked Nov 5, 2026. The corporation's $225 is the $175 minimum tax under the Authorized Shares method plus the $50 report. For a corporation, Accountable prices both methods in Tax.

Questions founders ask

Why is my Delaware franchise tax so high?

Delaware's notice uses the Authorized Shares method, which charges by authorized share count. With 10,000,000 authorized shares it comes to $85,165. Recalculate with the Assumed Par Value Capital method by entering gross assets and issued shares in your annual report.

What is the minimum Delaware franchise tax?

$175 under the Authorized Shares method (5,000 shares or less) and $400 under the Assumed Par Value Capital method, plus the $50 annual report fee.

When is Delaware franchise tax due?

March 1 every year for corporations, covering the calendar year before. Delaware LLCs pay their $400 tax by June 1.

What happens if I pay the Delaware franchise tax late?

Delaware adds a $200 penalty plus 1.5% interest a month on the tax and the penalty. A company that stays unpaid long enough loses its good standing.

Where do I get total gross assets?

From your balance sheet at December 31: total assets, the same number as Schedule L of your federal return. Closed, reconciled books make this a two-minute lookup.

Your gross assets, ready on January 1

Accountable closes December by itself, so total gross assets for the annual report are on your balance sheet the day the year ends, and your CPA gets the tax package in one click.

Start free

Sources, checked November 5, 2026: