Delaware LLCs and corporations are not the same here
Delaware is the most popular state to form a company in, so a lot of the advice floating around mixes up its two very different regimes. The single most important thing to get right: Delaware LLCs do not file an annual report. Corporations do. If you have an LLC and someone tells you to file a Delaware annual report, they are describing the corporate obligation, not yours.
What a Delaware LLC owes is a flat annual franchise tax of $300a payment, not a report. There is no form listing your managers or members, no informational statement, nothing to fill in beyond making the payment. It is one of the simplest ongoing obligations of any state, precisely because it is just a number due once a year.
The $300 LLC franchise tax
Every Delaware LLC (and limited partnership) owes the same $300 each year. It does not matter whether the LLC earned millions or nothing at all, whether it has one member or fifty, or whether it ever did any business. The tax is flat and universal. That amount has been stable, but confirm the current figure with the Division of Corporations when you pay, since state fees do change.
The flat structure is deliberate, it is what makes Delaware attractive for holding companies and single-purpose entities, because the annual cost is predictable and modest. But “modest” only stays modest if you pay it. Left unpaid, the $300 compounds with penalty and interest, and a forgotten Delaware LLC can quietly build up a surprising balance over a few years.
The June 1 deadline
The LLC franchise tax is due by June 1 each year. You pay it through the Division of Corporations' online franchise tax system; because there is no report to complete, the process is essentially confirming the LLC and paying. Note that this is a different date from the corporate deadline of March 1, another reason not to rely on generic “Delaware deadline” advice that may be written for corporations.
How Delaware corporations differ
For completeness, because so many people land here unsure which entity they have: a Delaware corporation must file an annual report and pay a franchise tax that is calculated on the number of authorized shares (or, alternatively, an assumed-par-value method), with a different minimum and a much higher ceiling than the LLC's flat $300. Corporations file by March 1. None of that applies to an LLC, but if your Delaware entity is actually an Inc., you are on the report-plus- share-tax track, and the numbers and deadline are different.
The $200 penalty and interest
Miss June 1 and Delaware adds a $200 penalty plus interest at 1.5% per month on the unpaid tax. Because the underlying tax is only $300, the $200 penalty is proportionally enormous, a late payment can be more than half again the original amount before interest even starts. As with any figure here, confirm the current penalty and interest rate with the Division, but the shape is clear: lateness is expensive relative to the small tax.
It also helps to understand why Delaware structures the LLC obligation this way. Delaware deliberately keeps the LLC filing burden light, a flat tax and no report, because its appeal rests on being predictable and low-friction for the enormous number of holding companies, special-purpose entities and investment vehicles organized there. The trade-off is that the state expects the $300 to arrive on time, every year, without a reminder mailing to lean on. For an owner with a single active LLC that is easy to manage; for someone holding several Delaware entities from a prior deal, the risk is losing track of one and discovering years of accrued tax, penalty and interest later. Either way, the obligation is simple, it just does not forgive being forgotten.
Good standing, and why it matters
Unpaid franchise tax puts a Delaware LLC out of good standing. That status blocks you from obtaining a certificate of good standing, which you may need to open a bank account, close a financing, sell the business, or register the LLC to operate in another state. After prolonged non-payment, Delaware can cancel the LLC for failure to pay, which is a messier ending than a deliberate cancellation and can require revival work if you ever needed the entity back.
How dissolving the LLC ends the tax
The $300 exists only because the LLC exists on Delaware's register. Cancel the LLC and the tax stops. Formally cancelling the LLC ends the franchise tax going forward.
In Delaware you close an LLC by filing a Certificate of Cancellation with the Division of Corporations; the state filing fee is around $200, confirm the current amount when you file. Crucially, Delaware will not accept the cancellation until all franchise taxes are paid in fullso the order is: settle the current $300 and any arrears, then file to cancel. Once the cancellation is processed, no further franchise tax accrues. We set out the full sequence on our guide to dissolving an LLC in Delawarewith the general mechanics on how to dissolve an LLC.
If the LLC ever obtained an EIN, cancelling with Delaware does not close your IRS business account. That is a separate federal step, and one worth doing, because otherwise you have an LLC that Delaware considers gone but the IRS still has on file.
Deciding what to do next
If the LLC is active and you plan to keep it, the routine could not be simpler: pay $300 by June 1 every year. If the LLC has served its purpose, a common situation with Delaware holding entities formed for a deal that is now done, paying another $300 just keeps a dormant company on the register. Cancelling it ends the tax for good, and because Delaware requires the tax current first, doing it sooner means less to catch up on.
We do not sell franchise tax filing; our work is dissolution, cancelling a Delaware LLC properly, taxes settled, so the Division of Corporations agrees it is done. If you are weighing keep-it versus close-it, a specialist can talk it through first. See the wider view on the LLC annual report hub.