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Do I need to pay the franchise taxes for a C-Corp in Delaware that lasted 6 months?

Bankruptcy and Debt 2 views 2 answers
The C- Corp was incorporated in Delaware at the end of June 2012. The business never took off, never made any income, no shares were issued and the Corp has no assets. Delaware tells me that I have to pay $400 franchise tax for 2012 and $400 franchise tax for 2013, plus the 2012 annual filing report to dissolve the corporation. Is this correct? What about Title 8, Chapter 5, 503 (d) or (f)? Do any of those sections come into play? Should I pay to properly dissolve this company? The money would come from my own pocket since the company has no money. I don't want this to have any kind of negative effect on me personally or my credit in the future. They also said that the company would go inactive after 2 years. Will it then be "administratively" dissolved?

Attorney Answers

2
Michael Potter ·
The franchise tax has nothing to do with the Success of any Business. So whether your company lasted for 6 months or 6 years or 6 decades is not the issue with the State of Delaware. Their issue is whether you paid (or failed to pay) the franchise tax. In your case, some of the facts you state may be of some help, so I'd recommend you have an attorney familiar with Delaware corporate law advise you. It may be possible to retract the franchise tax or you may have to comply with Delaware's back-payment demand in order to legally dissolve the Company. Look on .com under Find-A-Lawyer for a Corporate Law attorney. Best of Luck.
0 upvotes
Scott Wittlin ·
I agree that you are likely responsible for the tax. Years past I used to prepare these when I worked at a large CPA firm. My recollection is that DE calculates the franchise tax two different ways - you pay the lower of the two. But when you get the invoice the state only uses one method (even though the other method will result in a lower tax). I suggest you talk to someone who can help you to see if you can lower the amount due.
0 upvotes

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