Corporate Compliance & Annual Maintenance

Corporate compliance refers to the adherence of the laws and regulations that a business needs to uphold to ensure the company’s corporate veil isn’t pierced. Compliance requirements will vary based on the business’s locale and industry.

What is corporate compliance?

Corporate compliance refers to the adherence of the laws and regulations that a business needs to uphold to ensure the company's corporate veil isn't pierced. Compliance requirements will vary based on the business's locale and industry. To obtain limited liability protection of your personal assets, incorporating is the first and most important step.

However, to maintain this protection, you must operate your business separately from yourself and keep your corporation in compliance with all annual maintenance requirements.

Annual maintenance requirements include conducting meetings, keeping meeting minutes, drafting resolutions to authorize corporate actions, maintaining a Registered Agent and paying your Franchise Taxes.

What are the statutory requirements for annual maintenance?

The state of Delaware imposes only two annual maintenance requirements for companies that form here: (1) Pay your Franchise Taxes and (2) maintain a Registered Agent. If a company fails to do either of these, the state will void that company, charge penalties and possibly administratively dissolve that company.

What Happens if I Fail to Maintain Compliance?

Failing to maintain corporate compliance will result in loss of good standing for your business. If your company isn't in good standing, you may be faced with tax consequences, a loss of legal protections, and even an inability to conduct business.

How do I pay my Franchise Taxes and Registered Agent Fees?

Our service allows you to quickly pay your Franchise Taxes and Registered Agent Fees, making it easy to keep up with your corporation and LLC compliance requirements. For a small fee, we can file your Franchise Tax report with the state of Delaware prior to the deadline to ensure your company is not voided or charged late penalties.

Information on Delaware Franchise Tax

Want to know why you pay a Franchise Tax in Delaware, or when the Franchise Tax is due for a corporation or LLC? We are here to help answer all of your questions about annual maintenance and corporate compliance. With Harvard Business Services, Inc. as your Registered Agent, you can pay your Delaware Franchise Tax online.

When do I pay Franchise Taxes and Registered Agent Fees?

For corporations, Franchise Taxes are due to the State of Delaware by March 1 of each year. For LLCs, Franchise Taxes are due to the State of Delaware by June 1 of each year.

At Harvard Business Services, your Registered Agent Fees are due on the anniversary month of the formation of your company. Don't worry; as your Delaware Registered Agent, we will provide you with plenty of notice before the actual deadlines.

Why does my Franchise Tax report get mailed to my Registered Agent and not to me?

Perhaps the most important function of a Delaware Registered Agent is receiving and forwarding Franchise Tax reports in a timely fashion.

Since the state of Delaware does not require companies who incorporate here to furnish information about their owners' addresses or principal places of business, the only way the Secretary of State can mail important documents, such as Franchise Tax reports, to companies is through their Registered Agents.

Since our systems are directly linked to the state, we have the ability to print copies of your official Franchise Tax report right here in our office. In the event you should misplace the original document, we can replace it for you by ordering reprints.

When do I hold my first meeting?

Delaware law does not dictate when you should hold your first meeting. However, it is sound business practice to hold your organizational meeting as quickly as possible after forming your new company.

At this meeting, you will be managing issues such as directorships, shareholders, officers and issuing stock, as well as dealing with whatever contractual arrangements your company needs, such as leases, loan agreements and so on.

How do I comply with my local government?

Your business is considered domestic to the state where it is formed and foreign in all other states. To take advantage of Delaware's strong corporate law structure, many business owners choose Delaware as their domestic choice.

If your business will operate in a state other than its state of incorporation, we can complete the required (and often complicated) Foreign Qualification forms for you.

Why all of these formalities?

One of the primary reasons for forming a business entity under the label of a general corporation, close corporation, non-stock corporation, limited liability company or limited partnership is to create a barrier between your personal assets and your business.

There may come a time when creditors will look for weaknesses or irregularities in this barrier in order to gain access to your personal assets. This is why you should strictly segregate the operation of your business from your personal financial dealings and assets.