Delaware Annual Reports and Franchise Tax Due March 1st
Updated February 19, 2015
Note: This reminder is being sent for general information purposes to all clients who receive National Corporate Research, Ltd.’s corporate and compliance e-mail updates and is not related to a specific Delaware corporation NCR represents on your behalf. If you have signed up for NCR’s annual report compliance services, we will take care of filing your Delaware annual report.
We just wanted to remind you that Sunday, March 1st is the deadline for Delaware annual reports and payment of franchise taxes for domestic for-profit and nonprofit corporations. Late reports will result in the Delaware Division of Corporations assessing a $125 penalty in addition to the tax and annual report fee, plus interest.
Missing the Deadline Can Delay Transactions:
Note that Delaware will not issue Good Standing Certificates for corporations that have not met the annual report filing requirements. Therefore, if you have a closing on or after March 2nd involving a domestic Delaware for-profit or nonprofit corporation, you can avoid unpleasant surprises and delays in obtaining a Good Standing certificate by making sure the annual report has been filed and franchises taxes paid on or before the deadline.
Also keep in mind that Delaware requires that annual report(s) be filed prior to all dissolution and merger filings. We have seen this cause many problems as clients overlook or are unaware of this requirement and it ends up causing frustration when time-sensitive filings are delayed for this reason.
Requirements for Delaware Corporate Annual Reports:
Delaware annual reports for corporations must be filed electronically. If you are the designated tax contact for a Delaware corporation, by now, you should have received a notice from your registered agent. This notice provides instructions on how to file electronically using the registered agent’s system (if applicable) as well as how to file electronically through the Delaware Division of Corporations web site, www.corp.delaware.gov/paytaxes.shtml. Please note that the Delaware Secretary of State system will be unavailable after 11:45 pm on Sunday, March 1st. All filings must be submitted prior to that time on the final filing date in order to be accepted as timely and avoid the penalty and interest.
When preparing Delaware annual reports, note the following:
- ALL information must be completed for each annual report
- ALL directors and ONE officer must be listed (if no officers have been elected, there will be an option to check NONE and a Director or Incorporator can electronically sign off on report only if it is the first year of existence for the corporation)
- Principal business address (street address is required) must be listed
Some registered agent filing systems, such as NCR’s, offer advantages over using the state’s system by allowing you to complete multiple reports in one session and by retaining information on directors and officers so that it will not have to be re-entered in future years.
Calculating the Amount of Franchise Tax Due:
The amount due for Delaware's franchise tax is based on the corporation's share structure and can be determined using either the Authorized Shares Method or the Assumed Par Value Capital Method. If you have a large number of authorized shares and owe more than the minimum tax of $175, you can determine which method would result in the lowest tax due by clicking here to utilize Delaware's Franchise Tax Calculator.
If you need assistance with the tax calculation or the filing of your Delaware annual report, feel free to contact the knowledgeable service specialists in our Dover office by e-mail email@example.com. Note that last minute filings can be processed on NCR’s annual report filing web site through 10 PM Eastern Time on Sunday, March 1st.
Burundi to Begin Accepting Apostilles on February 13, 2015
Updated January 23, 2015
Please note that effective February 13, 2015, documents destined for use in Burundi will no longer require consular or embassy legalization. An apostille from the appropriate Secretary of State or U.S. Department of State will be accepted. (However, the following countries have raised an objection to the accession of Burundi, meaning that the convention will not enter into force between these countries and Burundi: Austria, Germany, Czech Republic and Poland)
Registered clients of NCR can download a complete list of countries and territories that are party to the Hague Convention Abolishing the Requirement of Legalization from the Authentication/Legalization Resources page of our website. On this page, you will also find our list of useful Authentication/Legalization websites and our list of notary search websites where you can verify the status of notaries.
If you are a client of NCR and would like to apply for a password, click here.
If you have any questions, please feel free to contact your NCR service specialist.
Appeals Court Rules in Favor of Unsecured Creditors in GM Bankruptcy Case
Updated January 22, 2015
On January 21, 2015, the U.S. Court of Appeals for the Second Circuit ruled that the $1.5 billion loan made to General Motors Co. prior to its 2009 Chapter 11 bankruptcy filing was unsecured debt as a result of a UCC3 termination statement that was filed in error. The court held that “although the termination statement mistakenly identified for termination a security interest that the lender did not intend to terminate, the secured lender authorized the filing of the document, and the termination statement was effective to terminate the security interest.”
In the initial stages of the Chapter 11 proceeding, the loan was repaid. This ruling will enable unpaid creditors from the 2009 bankruptcy to ask JPMorgan Chase Bank N.A. and its group of lenders to return the money so that it can be claimed by all of the unsecured creditors of the old General Motors.
To view the details of this ruling, click here.
For more background on this case, see our previous blog article, Delaware Supreme Court Finds Mistaken UCC Termination Statement Effective.
Holiday Closings for February and March 2015
Updated January 20, 2015
To assist you in planning closing dates and avoiding unpleasant surprises, National Corporate Research (NCR) has compiled a list of U.S. state holiday closings for February and March. To download the list in PDF format, click here.
For clients who work on international transactions, we have also compiled a list of corporate registry holiday closures in select countries. To access our international list of holiday closings for February and March, click here .
Please note that some jurisdictions declare holidays at the last minute. So if a particular filing date is important to you, contact your NCR service specialist and we will double check at that time to ensure the filing office will be open on the date you are interested in. Also note that as we become aware of any changes to the holiday closing lists, we will post updated versions of the lists to this page of our website.
If you have any questions, feel free to contact your NCR service specialist.
Subscribe to our updates to receive e-mail alerts of holiday closings every two months.
New York Enacts Article 9 Amendments
Updated December 18, 2014
On December 17, 2014, New York Assembly Bill 9933, which amends Articles 1, 7 and 9 of the Uniform Commercial Code, was signed into law by Governor Andrew Cuomo. This legislation became effective immediately.
As discussed in our previous update, New York’s version of the Article 9 Amendments includes Alternative A for individual debtor names (§ 9-503), thus requiring UCC financing statements to provide the name indicated on the individual debtor’s unexpired driver’s license or other state-issued photo ID card. If the debtor does not have a current driver’s license or state-issued ID card, the financing statement must provide the debtor’s surname (last name) and first personal name.
The omission of the transition provisions (Part 8) from New York’s enactment of the 2010 model Amendments to Article 9 may create issues that secured parties will need to address. For more information on this, and other key omissions from the model amendments, see the previous posting we made to our Corporate Transactions and Compliance blog.