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Delaware C-Corp vs LLC

A Delaware LLC pays a flat $400 tax by June 1 and files no annual report. A Delaware C-Corp files an annual report by March 1 and pays at least $225 a year, but its franchise tax grows with its shares and assets. Most US investors expect a C-Corp.

Facts checked against official sources on 7 November 2026

Yearly state charges side by side

C-CorpLLC
Annual reportYes, $50 feeNone
TaxFranchise tax, from $175Flat $400
State minimum a year$225$400
Due dateMarch 1June 1
Late payment$200 penalty plus 1.5% a month$200 penalty plus 1.5% a month

A registered agent’s fee comes on top for both, and both need an agent with a physical street address in Delaware.

Why the C-Corp minimum can mislead

The $175 minimum applies under the Authorized Shares method to 5,000 shares or fewer. A company with 10,000,000 authorized shares owes $85,165 under that method. The Assumed Par Value Capital method starts at $400 and uses issued shares and total gross assets; you pay the lower result of the two. A corporation with many authorized shares should therefore expect at least $450 a year with the report fee, not $225.

Investors and income tax

Most US investors expect a C-Corp, and an LLC is a common mistake for a company planning to raise venture capital. How an LLC’s income is taxed depends on its members, so we do not summarise it here. Ask a tax adviser how each form applies to you.

Sources

FAQ · 4 questions

Frequently asked questions

It depends on the shares. The state minimum is $225 for a C-Corp and $400 for an LLC, but a C-Corp with many authorized shares usually pays at least $450 under the Assumed Par Value Capital method, and more as assets grow.

No. A Delaware LLC files no annual report with the Division of Corporations. It pays a flat $400 annual tax by June 1, and a late payment adds a $200 penalty plus 1.5% interest a month.

US venture investors usually expect a corporation that can issue stock and options, which is why an LLC is a common mistake for a company planning to raise venture capital. Confirm the structure with your investors and legal adviser before you file.

A C-Corp files its annual report and pays franchise tax by March 1; companies owing $5,000 or more pay in instalments from June 1. An LLC pays its flat annual tax by June 1 and files no report.