When is Delaware franchise tax due?

March 1 for corporations, June 1 for LLCs/LPs. File online with the Division of Corporations and retain confirmation in your close binder.

Which method is cheaper: authorized shares or assumed par?

Early startups with high authorized but low issued shares usually save with assumed par. Model both; the default authorized-shares method overbills many startups.

What are penalties for late filing?

$200 late penalty plus 1.5% monthly interest for corps, plus loss of good standing blocking financings and M&A closings.

Do I owe if I incorporated late in the year?

Yes, prorated quirks aside, you still file. Confirm with current Division instructions and your registered agent.

TAX

Delaware Franchise Tax 2026: Authorized Shares vs Assumed Par Value Guide

BATO Editorial Team September 22, 2026 2 min read

Two Methods, One Choice

Method	Math	Best for
Authorized shares	Bracket by authorized count	Low authorized (e.g., 5k-10k)
Assumed par	Issued + gross assets / assumed par	High authorized, low issued + modest assets

Model both annually; election is per filing, not permanent.

Pair with Startup Entity, Delaware vs Wyoming, Cap Table, and Compliance Checklist.

Filing Checklist

Confirm authorized, issued, par, gross assets from stock ledger — see 409A.
Run both methods; retain calculation.
File + pay by Mar 1 (corp) / Jun 1 (LLC); calendar with Filing Deadlines.
Reconcile to GL and close binder — see Month-End Close.

Link registered-agent notices to Year-End Close to avoid missed mail.

Pitfalls

Defaulting to authorized-shares and overpaying 10x.
Missing good standing before Series A or IPO.
Forgetting qualification in operating states — see Multi-State.

Worked Example: 10M Authorized vs Assumed Par

Startup: 10,000,000 authorized at $0.0001 par, 8,000,000 issued, $2,000,000 gross assets.

Method	Math	Tax
Authorized shares (10M bracket)	Top bracket	~$85,000+
Assumed par	$2M assets / $0.0001 assumed par → scaled per Delaware formula	~$400–$2,000 range

Same company, ~50–200× difference. This is not a rounding choice — it is the single highest-ROI 30 minutes in startup tax compliance. Run both methods from the stock ledger every February, retain the calculation with the filing receipt, and reconcile the payment to the GL — see Month-End Close. The Division’s online calculator defaults to authorized-shares; override it deliberately.

Why Startups Overpay (Three Habits)

Founder files in year one, never revisits. Assumed par wins early (low assets, low issued) but the math flips as assets grow — remodel annually.
Par value set blindly at formation. $0.0001 par with 10M authorized is VC-standard; $1 par with 1M authorized creates assumed-par pain later. Coordinate charter terms with counsel before the first priced round — see Series A and Cap Table.
Registered-agent emails ignored. The agent forwards the notice; nobody owns the calendar. Assign the filing to controller + agent confirmation in the Compliance Checklist Q1 sweep, and link notices to Year-End Close so franchise mail never sits unread.

Good-Standing Diligence (What Investors Check)

Every financing and M&A diligence list asks for certificates of good standing in Delaware plus every qualified state — see Foreign Qualification. A lapsed franchise filing blocks closings: the certificate won’t issue, the deal pauses, and the $200 penalty plus monthly interest looks trivial next to a delayed wire. Pull certificates 2–3 weeks before any fundraise or acquisition milestone — see IPO Readiness — and file them in the data room with the calculation memo for Audit Procedures.