Delaware Company Annual Renewal and Maintenance Guidelines
After successfully registered in Delaware, the Corporation or LLC are required to operate in compliance with the General Corporation Law/Limited Liability Company Act of the State of Delaware. All Corporation and LLCs must have and maintain a Registered Agent, which has a physical street address in Delaware; must file Annual Reports to the Delaware Division of Corporation every year to update company’s information with State; must file Annual Franchise Tax Report to the Delaware Division of Corporation; must renew the Business License/Permit periodically.
According to Federal and State tax rules, all active business registered in Delaware must file tax returns on time, including business income tax, payroll tax and other relevant taxes returns.
The following four sections describe the Delaware company’s renewal and maintenance services and fees. The first section is the information about Delaware annual renewal requirements, including annual report, annual franchise tax report, registered office and registered agent and business license renewal.
The second section describes relevant tax filing services, including business income tax filing, payroll tax filing and foreign person’s U.S. source income subject to withholding tax. All U.S. companies are required to file tax returns on time to comply with tax laws.
The third section is the information about other maintenance services. Kaizen can provide high-quality audit service for you in compliance with accounting rules. Kaizen also offer bookkeeping service to develop and maintain your overall financial processes and management.
The fourth section summarize the above services and fees. The fees listed are based on estimation and only for your reference. The final service fee may be different according to actual circumstances.
Kaizen will send you the annual renewal notice and invoice two months before the due date via email. The service fee for the annual renewal includes provision the of registered office, registered agent, annual report filing and franchise tax payment, but not including business license endorsements renewal service. Kaizen will indicate the payment due date for renewal service on the notice, please be sure to pay the entire amount before the deadline, so that Kaizen can arrange further annual renewal process for your U.S. company. Kaizen shall not be liable for late penalty if Kaizen cannot receive the full service fee from you before the deadline.
1.
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Annual Renewal Requirements
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(1)
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Annual Report
All active business entities registered at Delaware must file Annual Reports to the Delaware Division of Corporation on or before March 1st (Corporation) or June 1st (LLC) following the end of the calendar year.
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(2)
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Annual Franchise Tax Report
All active business entities registered at Delaware must file Annual Franchise Tax Report to the Delaware Division of Corporation on or before March 1st (Corporation) or June 1st (LLC) following the end of the calendar year. If the tax is not paid on time, the state imposes a $200 late penalty, plus a monthly interest fee of 1.5 percent.
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(3)
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Registered Office and Registered Agent
Delaware law requires that every business entity must have and maintain a Registered Agent in the State of Delaware. The registered agent must have a physical street address in Delaware. Kaizen provides professional service to help you maintain and renew the registered agent annually.
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(4)
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Business License/Permit Renewal (extra fee required)
Generally, the state and local business licenses registered in Delaware must be renewed each year.
Kaizen will send an annual renewal notice to you two months before the due date.
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2.
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Tax Relevant Services
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(1)
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Income Tax Filing
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(a)
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Federal Income Tax Return
According to Internal Revenue Service (IRS), all business entities must file an income tax return on or before the following April 15th (Corporation) or March 15th (LLC) of the tax year, or Oct 15th (Corporation) or Sep 15th (LLC) with extension, if calendar year is applied on tax purpose. However, the business entity must pay the tax due in full no later than the original due date for filing its tax return (not including extensions). Interest and penalty will be charged on taxes paid late even if an extension of time to file is granted.
Note: LLC should file federal income tax return each year without paying any income tax based on pass-through principle. LLC can also choose to file as a Corporation, which should file and pay federal income tax each year.
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(b)
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Delaware State Income Tax Return
Every business entity doing business in Delaware is required to file the state income tax return regardless of the amount, if any, of its gross income or its taxable income. The taxable status of a company in Delaware follows the federal treatment of the company. Delaware businesses income tax returns are due in the case of a calendar year taxpayer, on or before April 15 of the following year. Delaware income tax rate is 8.7%.
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(2)
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Payroll Tax Filing and Relevant Services
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(a)
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Federal Payroll Taxes
If business entities have employees and pay wages in U.S., they must report income and payroll taxes withheld from their employees to Internal Revenue Service (IRS) periodically and deposit these taxes in full to an authorized bank or financial institution pursuant to Federal Tax Deposit Requirements. The business entities are also responsible for filing and paying Social and Medicare Taxes (employer share amount) and Federal Unemployment Taxes.
The deposit schedule for the payroll taxes depend upon the amount of business entities?payroll tax liability. Employers may be subject to criminal and civil sanctions for wilfully failing to pay employment taxes.
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(b)
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State Payroll Taxes
If the business entities will hire and pay wages to employees in Delaware, they need to register as an employer and open a withholding account with the Division of Revenue.
The business entities must report withholding tax from employee’s taxable wages or other remuneration and pay over to the Division of Revenue, if any employee existed. And employers must contribute to Unemployment Insurance Tax (UI).
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(c)
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Payroll Service
Kaizen also provides professional services to collect wage and hour information from the employer and use that information to calculate gross wages, subtract all pertinent withholdings and deductions, print checks, make direct deposits and prepare all employment tax filings. Kaizen can also prepare W-2 and 1099 forms for you and resolve any inquiries from the IRS or other government agency.
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(d)
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Foreign Person’s U.S. Source Income Subject to Withholding
According to Internal Revenue Code, the payments that certain foreign persons received from U.S. sources, are subject to tax withholding. And they must report the amount withheld to IRS, if any. The sources include dividends, interest, rents, annuities, etc. Kaizen can help you prepare Form 1042, 1042-S, W-8BEN or other forms required by government agencies.
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(3)
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Sales and Use Tax
Delaware does not impose Sales and Use Tax.
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(4)
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Foreign Banks and Financial Accounts Filing
If a business entity in US held bank or financial account out of US, the entity maybe required to file FBAR with Department of Treasury, or FATCA related forms with IRS. Please consult with Kaizen professional consultants for more information on filing process and fees.
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3.
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Other Maintenance Services
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(1)
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Audit Service
Public companies are required to submit the audit reports to the U.S. Securities and Exchange Commission annually. Private company may also need to prepare audited financial statements annually or periodically for some reasons, such as submitting audit report to lending party.
Kaizen can offer high-quality audit service for you in compliance with accounting rules.
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(2)
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Bookkeeping Service
Kaizen provides bookkeeping service to develop and maintain your overall financial processes and management. According to the supporting documents provided by you, Kaizen will maintain and update the accounting books in accordance with the tax and business law.
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4.
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Our Service Fee
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As discussed above, all active Delaware Corporations and LLCs are required to operate in compliance with the Delaware business laws. The business entities may also need to apply for the license and permits with state according to different industries. Kaizen U.S. office is a professional CPA firm, offers complete compliance services and business support, such as bookkeeping, financial statement audit, filing tax return, making payroll, etc. The partial services for Delaware company’s annual renewal and maintenance are listed for your reference
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Item
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Description
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Service Fees
(USD)
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1
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Annual renewal including registered agent, registered office, franchise tax and annual report fling fees
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Yearly
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900
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2
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Business license/permits renewal
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Yearly
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75
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3
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Federal and Delaware state business income tax filing
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Each filing
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800/up
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4
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Payroll tax filing and relevant services
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TBD
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TBD
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5
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Foreign banks and financial accounts filing
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Yearly
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TBD
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6
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Audit service
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Yearly
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15,000/up
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7
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Bookkeeping service
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monthly
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300/up
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Note:
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(1)
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Kaizen service fee for the annual renewal includes provision the of registered office, registered agent, annual report filing and franchise tax payment, but not including business license endorsements renewal service. |
(2)
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Kaizen will not charge extra fee (except the government fee) for business license/permits renewal service. |
(3)
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Kaizen service fee for federal and state corporate income tax return is depending on complexity and transactions of financial statements. Please consult with Kaizen consultants for more details. |
(4)
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Kaizen service fee for payroll tax filing and relevant services is based on numbers of employees. |
(5)
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Kaizen can handle foreign accounts filing. Please consult with Kaizen consultants for more details. |
(6)
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Kaizen service fee for audit service is based on the complexity of the financial conditions. |
(7)
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Kaizen service fee for bookkeeping is depending on the number of transactions. |
(8)
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Fees above do not include delivery fee. | |
You may also be interested in articles:
Delaware Corporation Registration Package
Delaware Limited Liability Company Registration Package
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