Amanda No Comments

Delaware Annual Report & Franchise Tax – Help! Part One

Last week when we discussed Annual Report Services (click here to read that blog), we mentioned most jurisdictions have annual filing Delaware Annual Report & Franchise Taxand/or tax requirements. Delaware is one of those jurisdictions that requires annual report filings and franchise tax payments. Depending on the entity type, both may be required or just one…but, we’ll get into those details later.  Since Delaware also happens to be the jurisdiction we seem to get the most questions about, we decided to tackle the subject in a series of blogs. Today we’ll start by answering just a few basic questions…

What is a Delaware Annual Report? This is a document filed annually with the State of Delaware Division of Corporations detailing pertinent company details. Information such as the Principal Place of Business, Officer and Director details, and stock information are included on the annual report. The stock information provided helps to determine the annual franchise tax due. Not all entities are required to file an annual report.

What is franchise tax? Franchise taxes are an annual fee paid to the State of Delaware Division of Corporations for your entity. For corporations, the franchise tax fee is based on authorized shares. For alternative entities, such as LLCs, the fee is a flat rate. Most entities are required to pay a franchise tax.

What entity types file an annual report and/or pay franchise taxes? When are they due?

Entity Type Annual Report Franchise Tax Due Date
Domestic Corporations Yes Yes March 1st
Exempt Domestic Corporations Yes No March 1st
Domestic Limited Liability Companies No Yes June 1st
Domestic Limited Partnerships No Yes June 1st
Foreign Corporations Yes Yes June 30th
Foreign Limited Liability Companies No Yes June 1st
Foreign Limited Partnerships No Yes June 1st
Delaware Statutory Trusts No No N/A
As mentioned above, these are just the basics. Over the next few weeks, we will continue to discuss Delaware annual reports and franchise taxes in more detail. Be sure to check back weekly or subscribe to the blog so you don’t miss out! Of course, if you have a question in the meantime, feel free to reach out to us. We’d be happy to help you out!

Amanda No Comments

Certificate of Incumbency – A Case Study

Over the past few weeks, we’ve covered the ins and outs of boat registrations, as well as the “Who?” “What?””Why?”and “How” forCertificate of Incumbency Case Study a Certificate of Incumbency. Today we wrap it all up with a real-life case study of how a Certificate of Incumbency was able to help an international boat owner.

An international client needed to prove to Israeli authorities he was the rightful owner of his boat. The boat was registered under the name of a Limited Liability Company (LLC). This client in turn owned the LLC. Sounds simple enough, right? Wrong… A basic LLC formation document in Delaware does not list the owners of the entity. So, how does the client prove ownership then? One suggestion his legal counsel gave was to file an Amendment in Delaware adding an article to show he was the owner. However, this would mean the client’s personal information, such as home address would become public information, which was not an ideal solution for this client. In talking with the client about the situation, we mentioned we often provide a Certificate of Incumbency for international clients needing to prove ownership to banking officials.  The client asked for a sample document and conferred with his attorney. The attorney agreed the Certificate of Incumbency would sufficiently meet the needs to prove his ownership. The client provided us with all the necessary documentation. We then drafted the certificate, had it notarized, and sent it to the State of Delaware for an Apostille. The end result? A very happy client!

If you have additional questions or need assistance with obtaining a certificate, give us a call or email us. We’re always happy to help you out in any way we can. Just remember, we can’t give legal or tax advice. You’ll have to contact an attorney or CPA for that.

Gennine No Comments

New Hampshire Corporate Law Updates

Incorporating Services, Ltd. (Incserv) is an active member of the National Public Records Research Association (NPRRA). One of the many benefits of this membership is the continuous flow of information from other members regarding changes in policy, law and processing of public records searching and filing across the US. We received the below information from the NPRRA.

New Hampshire has enacted the following legislation, effective as noted:

Senate Bill 42, Laws of 2017, effective August 27, 2017, has amended the business and nonprofit corporation laws by repealing the requirement that a public hearing be held in connection with domestic reinstatements. This applies to late reinstatements for business corporations.

The Bill may be accessed at http://www.gencourt.state.nh.us/bill_status/billText.aspx?sy=2017&v=HP&id=916.

Senate Bill 18, Laws of 2017, effective August 28, 2017, has amended the business corporation and LLC laws by authorizing revoked foreign corporations and foreign LLCs to apply for reinstatement.

The Bill may be accessed at http://www.gencourt.state.nh.us/bill_status/billText.aspx?sy=2017&id=918&txtFormat=pdf&v=current.

If you have questions or need assistance, feel free to contact us or call 800-346-4646.

Gennine No Comments

Arizona Senate Bill 1272

Arizona Senate Bill 1272Incorporating Services, Ltd. (Incserv) is an active member of the National Public Records Research Association (NPRRA). One of the many benefits of this membership is the continuous flow of information from other members regarding changes in policy, law and processing of public records searching and filing across the US. We received the below information from the NPRRA.

Arizona Senate Bill 1272 (2017 session), effective August 9, 2017, made various changes to the Arizona corporations law.

Procedural changes resulting from this bill include the following:

  • The Arizona Corporations Commission (“ACC”) will no longer automatically return a copy of approved documents. Instead, the ACC will only automatically return an approval letter. 
  • The ACC will continue to return copies of rejected documents along with a rejection letter.
  • The Statement of Change of Known Place of Business Address or Statutory Agent forms for corporations (domestic and foreign) and LLCs (domestic and foreign) have been revised, as the requirements for both have been somewhat simplified.
  • There is now a six-month suspension of the annual report requirements for domestic and foreign corporations that voluntarily file for dissolution or withdrawal. However, if the voluntary dissolution is not completed within that six month period, the annual report and any related fees (including any late filing penalties) will be due. The ACC has recommended that a tax clearance certificate be obtained and submitted with the dissolution or withdrawal filing to help avoid any penalty fees from accruing.
  • Foreign nonprofit corporations are no longer required to file applications for new authority when they amend their name, duration, or home jurisdiction. They can now file Articles of Amendment to Application for Authority with a certified copy of the amendment instead.
  • LLCs whose latest date to dissolve has passed can now be administratively dissolved. The ACC has advised that there are several thousand LLCs on their records that may be administratively dissolved due to this change, starting on August 9, 2017.

A copy of this bill is available here: https://apps.azleg.gov/BillStatus/GetDocumentPdf/451387

The ACC has also published a legislative update regarding this bill on their website here: http://www.azcc.gov/Divisions/Corporations/Legislative-changes-update-July-2017.pdf

If you have questions or need assistance, feel free to contact us or call 800-346-4646.

Gennine No Comments

Delaware House Bill 175 Passed

Delaware House Bill 175, passed on July 2nd, alters various fees assessed by the Delaware Secretary of State.  The Bill Synopsis is as follows:

“This Act alters various fees assessed by the Delaware Secretary of State. The Act provides that most changes to the fees and taxes assessed will take effect on August 1, 2017; however increases to the maximum franchise tax and the late penalty for the filing of an annual franchise tax report shall take effect for the tax year beginning January 1, 2017, and the increase of the assumed par value multiplier for calculation of the corporate franchise tax and the authorized shares multiplier for corporations with greater than 10,000 authorized shares for calculation of the corporate franchise tax shall take effect for the tax year beginning on January 1, 2018.”

Click here to read Delaware House Bill 175 in detail.

If you have any questions or need assistance with annual reports or franchise taxes, please do not hesitate to contact us.

Cullan No Comments

Can Delaware Be Dethroned?

Josh Twilley, President of Incorporating Services, Ltd. shares an article from the Delaware Business Times, featuring a Professor Charles Elson, a well-recognized expert on corporate governance at the University of Delaware. Mr. Elson will be presenting at UCLA on the topic of “Can Delaware Be Dethroned?” discussing whether Delaware’s preeminence as the legal home to most of the Fortune 500 companies can be displaced.

The Delaware Business Times recently caught up with Prof. Elson for a Q&A. You can read the article in its entirety here. Below are some of the highlights from this article posted on August 15, 2016:

  • Delaware has a reputation for fairness and neutrality in determining corporate matters because other stakeholders (either corporate or individual) do not have unfair influence over the legislation. The Delaware Court of Chancery continues to be a global leader in corporate adjudication in part because of this fair balance.
  • Charles believes the movement towards federalizing corporate law is essentially already in place, in that many other states follow Delaware’s lead in new corporate regulatory law. Federalizing would create inconsistencies in the law which would result in the Supreme Court taking up many corporate cases, which they have little interest in doing.
  • Corporate law alone is not strong enough to prevent bad actors from using the corporate structure for illegal means. Delaware is no more complicit in allowing bad actors to use the corporate legal structure than any other state. (I would add that Delaware is less complicit because many other states have a less thoroughly developed corporate legal structure — in a less regulated environment, bad actors can get away with more…)

If you’d like to learn more about forming an entity in Delaware, contact us and a Corporate Specialist will assist you.

The information within this post is intended for general information purposes only. Incserv and its employees cannot offer legal or financial advice. Please consult with your legal counsel for assistance in how this information may or may not affect you and your business prior to making any decisions. The above information (and any attachments) should be judged accordingly.

admin No Comments

Can Delaware Be Dethroned?

Can Delaware Be Dethroned?

delaware

Josh Twilley, President of Incorporating Services, Ltd. shares an article from the Delaware Business Times, featuring a Professor Charles Elson, a well-recognized expert on corporate governance at the University of Delaware. Mr. Elson will be presenting at UCLA on the topic of “Can Delaware Be Dethroned?” discussing whether Delaware’s preeminence as the legal home to most of the Fortune 500 companies can be displaced.

The Delaware Business Times recently caught up with Prof. Elson for a Q&A. You can read the article in its entirety here. Below are some of the highlights from this article posted on August 15, 2016:

* Delaware has a reputation for fairness and neutrality in determining corporate matters because other stakeholders (either corporate or individual) do not have unfair influence over the legislation. The Delaware Court of Chancery continues to be a global leader in corporate adjudication in part because of this fair balance.

* Charles believes the movement towards federalizing corporate law is essentially already in place, in that many other states follow Delaware’s lead in new corporate regulatory law. Federalizing would create inconsistencies in the law which would result in the Supreme Court taking up many corporate cases, which they have little interest in doing.

* Corporate law alone is not strong enough to prevent bad actors from using the corporate structure for illegal means. Delaware is no more complicit in allowing bad actors to use the corporate legal structure than any other state. (I would add that Delaware is less complicit because many other states have a less thoroughly developed corporate legal structure — in a less regulated environment, bad actors can get away with more…)

If you’d like to learn more about forming an entity in Delaware, contact us and a Corporate Specialist will assist you.

The information within this post is intended for general information purposes only. Incserv and its employees cannot offer legal or financial advice. Please consult with your legal counsel for assistance in how this information may or may not affect you and your business prior to making any decisions. The above information (and any attachments) should be judged accordingly.