If you’ve incorporated your startup as a Delaware C-Corp, you're legally required to pay Delaware Franchise Tax each year, even if you made $0 in revenue. Missing the March 1 deadline can cost you hundreds in penalties and block future fundraising. This guide explains exactly what you owe and how to pay.
Despite its name, it’s not a tax on franchises, it’s a state fee for the privilege of doing business in Delaware as a C-Corp.
Whether you're:
Pre-revenue
Solo founder
Funded startup
You must file and pay each year to remain in good standing with the Delaware Division of Corporations.
🗓️ March 1
This is a hard deadline. There are no automatic extensions.
🔗 Want to see all your 2025 deadlines? Check out our Startup Tax Calendar
There are two methods to calculate your Franchise Tax:
$175 for 5,000 shares or less
$250 for 5,001 to 10,000 shares
+$85 per additional 10,000 shares
Maximum tax: $200,000
Based on actual gross assets and issued shares
Usually results in lower tax for early-stage startups
Can reduce your tax to as low as $400
💡 Tip: Most venture-backed startups have 10M+ shares, so the default method = very expensive. Always switch to the par value method when filing.
| ❌ Failure to File or Pay | ⚠️ Penalty |
|---|---|
| Missed deadline | $200 late fee + 1.5% monthly interest |
| Long-term non-filing | Loss of good standing in Delaware |
| Fundraising impact | VC due diligence will flag this |
Not paying your Delaware Franchise Tax can delay fundraising rounds, block bank approvals, and even require legal reinstatement.
Enter your Delaware Business Entity File Number
Choose the Assumed Par Value Method
Pay via credit card or ACH
Need help choosing the right method or calculating par value?
Use TaxHero AI to auto-calculate and file it correctly.
To file via the Par Value method, gather:
Gross assets from IRS balance sheet
Number of issued shares
Total authorized shares
Your EIN and DE Entity File Number
Don’t have your balance sheet yet? Check out our startup-first-year filing guide
| Item | Details |
|---|---|
| Who must pay | All Delaware C-Corps |
| Due date | March 1 |
| Minimum amount | $175 (default), $400 (par method) |
| Recommended method | Assumed Par Value |
| How to pay | Online at corp.delaware.gov |
| Penalties for missing | $200 + monthly interest |
TaxHero AI helps early-stage Delaware startups:
Calculate the lowest possible tax
File Franchise Tax + IRS Form 1120
Avoid penalties and maintain good standing
🧠 Try TaxHero → https://taxhero.vc/
With AI-powered bookkeeping and tax filing, you stay focused on what matters: building your startup.
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