Delaware Incorporation Fees: Franchise Tax, Agents, and Penalties

Delaware incorporation fees start at roughly $89 for the state filing, but what you pay over the life of the company depends on how many shares you authorize, which franchise tax method you use, and what you spend each year to stay in good standing. Franchise tax alone runs from $175 to $200,000 a year, a registered agent typically costs $50 to $200 annually, and missing the March 1 deadline adds a $200 penalty plus 1.5% monthly interest. The numbers below cover the full picture, from day one through every year after.

What the Initial Filing Costs

Delaware calculates the filing fee for a stock corporation based on authorized shares. For par value stock, the rate is $0.02 per share for the first 20,000 shares, $0.01 per share for the next 180,000, and $0.004 per share above 200,000. No-par stock uses a slightly different schedule. The shares-based portion cannot fall below $15.¹ On top of that, a $25 fee applies to every certificate of incorporation filing, plus administrative charges that bring the standard minimum total to roughly $89 for a corporation authorizing a small number of shares.

Authorizing more shares than you need is the single most expensive formation mistake. Share count drives the filing fee and, more importantly, feeds into the annual franchise tax calculation for every year the company exists. A corporation that authorizes 10 million shares when it only needs 10,000 will pay dramatically more both upfront and every March after.

Additional document fees sit outside the filing fee. A short-form certificate of status costs $50, and a long-form certificate of good standing is $175.² Certified copies of filed documents carry per-document fees as well.

Expedited Processing

Standard filings take several business days. If you need faster turnaround, Delaware charges a premium: $1,000 for one-hour service, $500 for two-hour, $100 to $200 for same-day, and $50 to $100 for next-day. Each tier has a cutoff. One-hour filings must arrive by 9:00 PM Eastern, same-day by 2:00 PM, and next-day by 7:00 PM.³ For a funding-round closing, the one- or two-hour tier earns its price. For a routine incorporation, next-day is usually fast enough.

Annual Franchise Tax

Every active Delaware corporation owes an annual franchise tax, whether or not it generates revenue. Delaware lets you choose between two methods and pay the lower amount. The state’s online calculator defaults to the Authorized Shares Method, which often produces a far higher bill, so always run both before paying.⁴

Authorized Shares Method

This method bases the tax entirely on authorized shares, regardless of how many have actually been issued. The tiers:

5,000 shares or fewer: $175, the minimum under this method.
5,001 to 10,000 shares: $250.
Each additional 10,000 shares or portion: add $85.

The number climbs quickly. A corporation with 1 million authorized shares owes roughly $8,665 a year under this method. The ceiling is $200,000.⁴

Assumed Par Value Capital Method

This method pulls in your total gross assets (from federal Form 1120, Schedule L) and the number of shares actually issued. Divide total gross assets by total issued shares to get the assumed par value per share, multiply by authorized shares to get assumed par value capital, then apply $400 per $1 million or fraction thereof. No-par stock is assigned $100 per share for this calculation. The minimum is $400 and the maximum is $200,000.⁵

For corporations that authorized a large number of shares but hold modest assets, this method almost always produces the lower bill. Startups that issued millions of authorized shares at formation routinely save thousands a year by electing it. The tradeoff is more detailed financial disclosure on the annual report.

Large Corporate Filers

A separate category applies to corporations that would otherwise owe $200,000 under either method and are publicly listed on a national securities exchange with consolidated annual gross revenues or assets of at least $750 million. Their franchise tax is fixed at $250,000.⁵

The Annual Report

Franchise tax payment and the annual report move together. Every active corporation must file an annual franchise tax report by March 1 listing the registered office and agent, the nature of the business, the principal place of business (which cannot be the registered agent’s address unless the company actually operates there), the names and addresses of all directors and the signing officer, and stock authorization details.⁶ Filing happens online through the Division of Corporations portal, where the report and tax payment go through as one transaction. You cannot file the report without paying the tax, and skipping either triggers penalties.⁷

Registered Agent Fees

Every Delaware corporation must keep a registered agent with a physical street address in the state. The agent accepts legal papers, including lawsuits, and forwards notices about tax and reporting deadlines. A corporation physically located in Delaware can act as its own agent; otherwise, you’ll hire one.⁸ The agent can be an individual Delaware resident, the corporation itself (if it has a Delaware office), or another business entity authorized to serve in that role, and must be generally present at the designated address during normal business hours.⁹

Commercial services typically run $50 to $200 a year, making this one of the cheaper line items on a Delaware corporation’s budget. Letting the agent lapse carries real risk, though. Without one on file, you won’t receive service of process, and a lawsuit can proceed against the company without your knowledge.

Penalties and Charter Voidance

Missing the March 1 deadline on either the annual report or the franchise tax triggers a $200 penalty plus 1.5% monthly interest on the unpaid balance.⁷ Interest compounds, so a $10,000 tax bill left unpaid for a year adds roughly $1,800 in interest on top of the $200 penalty.

The bigger risk is charter voidance. If a corporation fails to pay its franchise tax or file a complete annual report for one year, its charter becomes void and all corporate powers are declared inoperative. The Secretary of State sends a warning notice by November 30, giving delinquent corporations until the following March 1 to cure.¹⁰ A voided charter means the corporation cannot contract, sue, or conduct business, and essentially ceases to exist as a legal entity.

Revival is available but expensive. The corporation files a certificate of revival and pays all franchise taxes, penalties, and interest owed at the time the charter was voided. If the charter has been void for more than five years, the corporation instead pays three times the annual franchise tax that would be due in the revival year.¹¹ For a corporation with a large share authorization, that three-times multiplier can run into six figures.

Costs Beyond Delaware Itself

The Delaware filing is only part of what you’ll pay to run the company.

Foreign Qualification in Other States

Incorporating in Delaware does not grant permission to do business elsewhere. If the corporation has employees, an office, inventory, or substantial ongoing activity in another state, it will almost certainly need to register there as a foreign corporation. Even a purely online business usually needs to register in the state where its founders work and direct activities.

Skipping the step has real consequences. Most states bar unregistered foreign corporations from filing lawsuits in their courts until they register and pay back fees, and some impose civil penalties on top. Contracts remain valid and you can still defend lawsuits, but losing the ability to enforce agreements is a serious handicap. Foreign qualification fees commonly fall in the $100 to $300 range, with ongoing annual report obligations in each state where you register.

Federal Filings

An EIN from the IRS is free and can be obtained online once state formation is complete; a U.S.-based applicant receives the number immediately. The online session times out after 15 minutes of inactivity, and only one EIN per responsible party is issued per day.¹²

If the corporation raises money through a private offering under Regulation D, SEC Form D must be filed electronically through EDGAR within 15 calendar days of the first sale. There is no federal filing fee, but many states charge a separate blue sky notice fee for each state where investors reside.¹³

Beneficial Ownership Information reporting under the Corporate Transparency Act once applied to most new corporations, but an interim final rule published March 26, 2025, exempted all entities formed in the United States. As of 2026, only foreign-formed entities registered to do business in the U.S. must report. This area has been in flux, so confirm the current status on FinCEN’s website before relying on the exemption.¹⁴

How a Delaware LLC Compares on Cost

If a corporation isn’t a requirement for your business, an LLC is cheaper. The Delaware LLC certificate of formation costs $110, and LLCs pay a flat $300 annual franchise tax due June 1. There are no calculation methods, no shares tiers, and no annual report filing with the Division of Corporations.

Corporations offer structures that outside investors expect, cleaner stock option plans for employees, and well-developed case law on director duties. LLCs offer pass-through taxation by default and fewer formalities. A single-founder consulting business with no plans to raise venture capital usually comes out ahead with the LLC. A startup planning to issue employee stock and raise institutional money almost always needs the corporation despite the higher compliance cost.

1
Justia Law. Delaware Code Title 8 Section 391 – Amounts Payable to Secretary of State
2
Delaware Division of Corporations. Accessing Corporate Information
3
Delaware Division of Corporations. Expedited Services
4
Delaware Division of Corporations. How to Calculate Franchise Taxes
5
Delaware Department of State. Delaware Corporate Franchise Tax Guide
6
Delaware Code Online. Delaware Code Title 8 Chapter 5 – Corporation Franchise Tax
7
Delaware Division of Corporations. Annual Report and Tax Instructions
8
State of Delaware Division of Corporations. FAQs Regarding Registered Agents
9
Delaware Division of Corporations. Registered Agent Listing Standards
10
Justia Law. Delaware Code Title 8 Section 510 – Failure to Pay Tax or File a Complete Annual Franchise Tax Report
11
Justia Law. Delaware Code Title 8 Section 312 – Revival of Certificate of Incorporation
12
Internal Revenue Service. Get an Employer Identification Number
13
U.S. Securities and Exchange Commission. Frequently Asked Questions and Answers on Form D
14
FinCEN. Beneficial Ownership Information Reporting