Post-Incorporation Compliance Checklist

Delaware sends a franchise tax bill calculated using the Authorized Shares method, which can result in absurdly high bills for companies with many authorized shares. A startup with 10,000,000 authorized shares might receive a bill for $75,000+ using this method.

The Assumed Par Value Capital method almost always results in a much lower tax (often the $400 minimum) for early-stage companies. You can use this method by calculating it yourself and paying the lower amount. Delaware allows you to choose whichever method results in a lower tax.

If your founder stock is subject to vesting, you have exactly 30 days from the date the stock is granted to file an 83(b) election with the IRS. This deadline is absolute — there is no extension, no exception, no appeal. If you miss it, you will be taxed on the stock's value as it vests, which could result in a massive tax bill if the company's value increases.

As a UK founder, the challenge is mailing the form to the IRS from the UK within 30 days. Use USPS Global Express Guaranteed, FedEx, or DHL for trackable delivery. Some founders have their US registered agent forward the form domestically on their behalf.

Many UK founders focus exclusively on US compliance and forget that HMRC still requires reporting. As a UK tax resident, you must report worldwide income on your Self Assessment return, including:

• Any salary or dividends from the US company
• Capital gains from selling shares in the US company
• Deemed income from certain US investments

Additionally, if you operate the US company primarily from the UK, you may inadvertently create a UK permanent establishment for the US company, triggering UK corporation tax obligations. Consult a cross-border tax adviser.

Delaware corporations must maintain certain formalities to preserve their limited liability protection. Failing to do so can expose founders to personal liability ("piercing the corporate veil"). Common failures include:

• Co-mingling personal and business funds
• Not holding annual board meetings or keeping minutes
• Not properly issuing stock certificates or maintaining a stock ledger
• Signing contracts in your personal name instead of as an officer of the corporation
• Not maintaining adequate capitalization (funding the company sufficiently)

The Corporate Transparency Act requires most companies to file a Beneficial Ownership Information (BOI) report with FinCEN. Companies formed in 2024 or later must file within 90 days of formation. Existing companies formed before 2024 had until January 1, 2025.

As a UK founder, you must report your personal details (name, date of birth, address, and a copy of your passport or UK driving licence). All individuals with 25%+ ownership or substantial control must be reported.

See our complete FinCEN BOI Reporting Guide for step-by-step instructions.

Yes. A Delaware C-Corp must file a Form 1120 federal tax return every year, regardless of whether it had any revenue. Additionally, if you (a foreign person) had any reportable transactions with the company — including initial capital contributions — you must also file Form 5472. The $25,000 penalty for failing to file Form 5472 applies even if the company had zero revenue.

The minimum franchise tax for a Delaware C-Corp is $400 per year, plus a $50 annual report fee (due June 1). This minimum applies when using the Assumed Par Value Capital method. If you use the Authorized Shares method with 10M+ authorized shares, the calculation can produce much higher amounts. Always use whichever method results in the lower tax — Delaware allows this.

Yes. The UK-US Double Taxation Treaty allows you to claim Foreign Tax Credit Relief on your UK Self Assessment return (SA106 pages). This prevents you from being taxed twice on the same income. You can claim relief for US federal income tax, state income tax, and certain other US taxes. However, Delaware franchise tax is not an income tax and generally cannot be claimed as a foreign tax credit in the UK.

If you miss the March 1 franchise tax deadline, Delaware assesses a $200 late penalty plus 1.5% monthly interest on the unpaid amount. If you fail to pay for multiple years, your company can lose its "good standing" status and eventually be voided (administratively dissolved) by the state. Reinstatement requires paying all back taxes, penalties, and interest, plus a reinstatement fee. Loss of good standing can also prevent you from raising funding, opening bank accounts, or conducting certain transactions.