Legal Question in Business Law in Delaware

I intend to form a Delaware Corp.. authorize 10.000.000 shares with a par value of 0.0001, but issue only 6.000.000 of those shares. I'm having difficulty determining what my franchise tax will be. The state of Delaware has a tax calculator on its site, but to make the calculation it requires also the "total gross assets" of the company. Since I'm only forming the company, I don't have any revenue yet so I don't really know what my total gross assets are. How do I determine that? Can I just pick a number that feels right? What if I pick zero? I don't want to end up paying a ridiculously high franchise tax.

Asked on 10/11/16, 6:25 am

1 Answer from Attorneys

Bruce McCullough Bodell Bove', LLC

The assumed par value method works from assets, not revenue. The franchise tax will be due on March 1 so you will calculate at that point. Since you are just starting out, you may not have much in the way of assets. Assume hypothetically $10,000 in assets (startup capital) or even $100,000 in assets (some early business success). Putting either amount of assets in the Del. Division of Corporations Franchise Tax Calculator worksheet (, along with your numbers on authorized and issued shares, yields the same minimum franchise tax of $350.00.

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Answered on 10/11/16, 7:35 am

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