Formed a Delaware LLC last year for an online store. No physical presence there, no employees, no customers in the state. Do I still need to file a Delaware annual report and pay the franchise tax? I keep seeing conflicting answers.
LLC
My Delaware LLC has no employees, office, or customers in Delaware
Yes, Delaware requires an annual report and franchise tax for every LLC formed there, regardless of activity. The minimum franchise tax is $300. You file it with the Division of Corporations by June 1.
But if you have no Delaware source income, do you still owe the $300? I thought that was just the minimum tax.
The $300 is the minimum franchise tax. It's not based on income or activity. It's a flat fee for maintaining the LLC. So yes, you owe it.
Thanks. What about the registered agent? I have one, but do I need a physical office in Delaware?
No office needed. Registered agent is enough. But make sure your agent is legitimate and you're getting the annual report reminder. Miss it and you get penalties.
Also check if your state of operation requires foreign qualification. If you're running the business from another state, you might need to register there too. That's separate from Delaware.
I'm in California. I haven't registered as foreign there yet. Is that a problem?
Potentially. California is aggressive about it. If you're doing business from there, you likely need to register. But I'm not a lawyer, so verify.
The California franchise tax board might also want their $800 minimum. That's separate from Delaware.
Yeah, the $800 California LLC tax is no joke. And they can assess penalties for not registering.