ere at Fondo we put taxes, tax credits, and bookkeeping on autopilot for 1,000+ busy founders. By now you’ve probably received the nasty gram from Delaware. Each year, Delaware (or sometimes your company’s registered agent) will send you snail mail that says you owe $50k+ to Delaware for your Annual Franchise Tax.
This is because when Delaware sends out these automated notices, they use what’s called the “Authorized Shares Method” to calculate the tax you owe. The thing most first time founders don’t know is that you can calculate and pay Delaware Franchise Tax using either the “Authorized Shares Method” or the “Assumed Par Value Method” -- and when you use the “Assumped Par Value Method” your tax due will likely be $450 (not $50k+)
How to calculate the two different methods
If you want to know exactly how these methods are calculated you can see Fondo’s founder guide to Delaware Franchise Tax here.
Can I do this myself?
Yes, you can file this yourself here: https://corp.delaware.gov/
If you have any questions, doubts, want to avoid a painful website, or just want peace of mind that this is being done by a CPA, Fondo will do this for you for $1: tryfondo.com/1
We have several CPAs on our team including the most important roles for doing your accounting work: Chief Accounting Officer, Director of Tax, and Director of Accounting. Even if you don’t want to work with Fondo, I would recommend to work with a firm or platform with experienced CPAs on the team. There are some startups out there where the founder offers to do accounting and tax work for you and in some states this is illegal.
How we’ve saved startups from $76M+ in overpayment so far
At Fondo we currently support 1,000+ startups with their taxes including Delaware Franchise Tax.
When we file your Delaware Franchise Tax our CPAs make sure it is filed using the correct method so you avoid overpayment to Delaware.
(Huge thank you to @Wiz 👋🏻 CEO @Cardinal for letting us handle this for you)
When you use Fondo we will:
1. Make sure your Delaware Franchise Tax is filed using the correct method that yields the lowest possible tax owed
2. Get a refund from Delaware if you've accidentally paid using the wrong method (we’ve helped founders even get $100k+ back)
(Huge thank you to @Chris Bakke CEO @Laskie acq. by @X for letting us handle this for you)
We’d love to take this off of your plate for $1: tryfondo.com/1
Want an instant quote or just want to get started? Get started here: app.tryfondo.com/onboarding
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Disclaimer
This blog for informational purposes only and does not constitute legal or tax advice or create an attorney-client relationship. Companies should consult their own attorneys or tax accountants for advice on these issues. Because of the generality of the issues discussed in this piece, the information provided may not apply in all situations and should not be acted upon without specific legal or tax advice based on particular situations.
