Explanation of Franchise Tax

Forget the whole concept of a business franchise like McDonald’s that you should have invested in 20 years ago. That’s NOT what Franchise Tax is all about.

The word “Franchise” in this context means the permission from the State of Delaware – as a legal jurisdiction — to own and operate the company you formed under their authority. By incorporating in Delaware you gain a professional legal framework in which to operate your company. Delaware’s world-class Corporate Law determines your corporate governance. You have access to the Delaware Court of Chancery and you pay tax the State of Delaware every year you’re in business.

The good news is that Delaware is one of the simplest and least expensive states for Franchise Tax. In Delaware, a company with 5,000 shares or less pays a minimum of $125 per year in Franchise taxes and fees. A Delaware LLC pays only $250 per year in Franchise Tax.

To pay your Delaware Franchise Tax simply through Delawareinc.com follow this link: www.delawareinc.com/payft.

This blog category will help you understand Franchise Tax as time goes on. We invite you to join the conversation by leaving a question or comment.