How This Works
This is an interactive mockup of Delaware's eCorp dashboard. Enter your company's data in the highlighted fields and click "Recalculate Tax" to see how much you could save.
Quick Start: Choose Your Company Type
🌱 Seed-Stage Startup
Raised $500K, issued shares to founders and small angel round.
🚀 Series A Company
Raised $5M Series A, growing team with option pool.
🔧 Bootstrapped Company
Converted from LLC, minimal outside investment.
📈 Series B+ Company
Multiple funding rounds, significant assets.
OF
DE
| Begin Date | End Date | Stock Class | Authorized Shares | Par Value | Issued Shares * | Gross Assets * |
|---|---|---|---|---|---|---|
| 01/15/2021 | 12/31/2024 | COMMON | $0.00001 | Often Left Blank! | Often Left Blank! | |
| 01/15/2021 | 12/31/2024 | PREFERRED | $0.00001 |
How to Fix Your Delaware Franchise Tax Bill
Follow these steps to amend your Delaware Annual Report and reduce your franchise tax from $75K+ to the minimum (~$400).
Time Required
This process takes about 15-20 minutes. You'll need your company's cap table and most recent balance sheet (Form 1120, Schedule L).
Gather Your Information
Before logging into Delaware's system, collect these items:
-
Delaware Entity File Number Found on your Certificate of Incorporation (usually 7 digits)
-
Cap Table as of December 31 Shows total ISSUED shares (Common + Preferred) — NOT authorized shares
-
Total Gross Assets From Form 1120, Schedule L, Line 15 (Total Assets) as of fiscal year end
-
Officer & Director Information Names and addresses for at least one officer and all directors
Log Into Delaware eCorp
Go to Delaware's online filing system:
https://icis.corp.delaware.gov/ecorp/
Click "Pay Taxes / File Annual Report" and enter your Entity File Number.
Fill In the Critical Fields
In the Stock Information section, you MUST fill in:
The Two Fields That Matter Most
Issued Shares: Enter the actual number of shares issued to shareholders (from your cap table). Do NOT include option pool or authorized-but-unissued shares.
Gross Assets: Enter your Total Assets from Form 1120, Schedule L. This is typically the last line of your balance sheet.
Click "Recalculate Tax"
After entering Issued Shares and Gross Assets, click the "Recalculate Tax" button. The system will switch to the Assumed Par Value Capital Method and your tax should drop dramatically.
Expected Result
Your franchise tax should drop from $75,000+ to somewhere between $400 and $2,000 depending on your company's size.
Complete Remaining Fields & Submit
Fill in the rest of the required information:
- Principal Place of Business (your company's address)
- Nature of Business (select from dropdown)
- Officer Information (at least one officer)
- Director Information (all current directors)
- Check the Terms & Conditions box
Submit and pay the recalculated amount (tax + $50 filing fee for amendments).
Need Help Filing Your Amendment?
I help startups navigate Delaware corporate filings. If you're unsure about your share counts or need help with the amendment, I can walk you through it.
Get Help →Why This Happens: The Two Calculation Methods
Delaware offers two methods for calculating franchise tax. The problem is that if you don't provide certain information, Delaware defaults to the method that's almost always more expensive for startups.
Authorized Shares Method
Each additional 10,000 = $85
Minimum: $175
Maximum: $200,000
Why it's brutal for startups: You're taxed on all AUTHORIZED shares — including millions reserved for future employees, investors, and growth that haven't been issued yet.
Example: 15M authorized shares = $175 + (1,499 × $85) = $75,215
Assumed Par Value Capital Method
Par Value Capital = Authorized × Assumed Par
Tax = (Capital ÷ $1M) × $400
Minimum: $400 | Maximum: $200,000
Why it's fair: Your tax is based on your actual economic footprint (gross assets and issued shares), not theoretical maximum shares.
Example: $500K assets ÷ 3.5M issued = $0.14/share × 15M auth = $2.1M capital = $857
Common Mistakes (Even by Experienced CPAs)
Leaving Issued Shares Blank
The most common mistake. Many CPAs don't realize this field needs to be filled in, or they don't have access to the company's cap table. Delaware then defaults to the Authorized Shares Method.
Leaving Gross Assets Blank
Even if Issued Shares is filled in, leaving Gross Assets blank prevents Delaware from using the Assumed Par Value Method. Both fields are required.
Including Option Pool in Issued Shares
Stock options that have been GRANTED but not EXERCISED are NOT issued shares. Only count shares that have actually been issued to shareholders.
Using Authorized Shares Instead of Issued
Some filers mistakenly enter their authorized share count (from the COI) instead of their issued share count (from the cap table). These are very different numbers.
Real-World Impact
Here's what different types of companies typically pay when the fields are filled correctly vs. left blank:
| Company Type | With Blank Fields | With Correct Data | Savings |
|---|---|---|---|
| Pre-Seed (10M auth) | $85,175 | $400 | $84,775 |
| Seed Stage (15M auth) | $127,675 | $400-$600 | ~$127,000 |
| Series A (20M auth) | $170,175 | $600-$1,200 | ~$169,000 |
| Series B+ (50M+ auth) | $200,000 (max) | $1,000-$5,000 | ~$195,000 |
Frequently Asked Questions
Your issued shares count comes from your cap table (capitalization table). This is different from your Certificate of Incorporation, which shows authorized shares.
Add up all shares that have actually been issued to:
- Founders
- Investors (all preferred series)
- Employees who have exercised options
- Any other shareholders
Do NOT include: Unexercised stock options, warrants, or reserved-but-unissued shares.
Gross Assets = Total Assets from your company's balance sheet as of fiscal year end (usually December 31).
If your company files Form 1120, it's on Schedule L, Line 15 (Total Assets).
If you don't have formal financials yet, estimate based on:
- Cash in bank accounts
- Value of equipment, IP, or other assets
- Investment amounts received (before spending)
Yes! You can file an amended Annual Report with correct information. Delaware will recalculate your tax and issue a credit for the overpayment.
The credit can be applied to future years' franchise tax or, in some cases, refunded. Contact Delaware's Franchise Tax Department at 302-739-3073, Option 3 to discuss your specific situation.
If your stock structure changed during the year (e.g., you issued new preferred stock), Delaware's form will show multiple time periods. For each period, enter:
- The issued shares as of that period's end date
- Use the fiscal year-end Gross Assets for all periods (or assets as of 30 days within each period's end date)
The Asset Date must be within 30 days of the period end date, or it can be your fiscal year end date.
No. Only include shares that have actually been issued to shareholders.
- Include: Shares issued upon option exercise
- Exclude: Granted but unexercised options
- Exclude: Reserved shares in the option pool
- Exclude: Warrants (until exercised)
Under both methods:
- Minimum: $400 (most startups pay this)
- Maximum: $200,000 (caps both methods)
There's also a $100 Annual Report filing fee on top of the franchise tax.
For most corporations: March 1 of each year, covering the prior tax year.
If you miss the deadline, penalties and 1.5% monthly interest accrue. The interest compounds, which is why old unpaid balances can grow significantly.
Still Have Questions?
Every company's situation is a bit different. If you're unsure about your share counts, asset values, or how to file the amendment, I'm happy to help.
Ask a Question →