Delaware Franchise Tax: 10 Million Shares, Two Methods
17 October 2026 · Informational only · No affiliate links · 3 min read
General information, not tax, legal or financial advice. We are not the State of Delaware and are not affiliated with it. Check corp.delaware.gov or ask a qualified professional. Sources read on October 17, 2026 (passages cited). Dates after 2026 are expected; the amounts shown are the current rates on the State pages, not confirmed 2027 rates. Examples use made-up numbers. This page contains no affiliate links.
Short answer: the authorized shares method grows by $85 for every 10,000 authorized shares. For a company with 10,000,000 authorized shares, that formula gives about $85,165; the assumed par value method for a company with few assets can give a four-figure or lower result. The State says to use the method that gives the lesser tax, and that if you do not report issued shares and gross assets, the authorized shares method is used by default (§503(b)). The maximum is $200,000.
The arithmetic (authorized shares method)
Shares above 10,000: 10,000,000 − 10,000 = 9,990,000, which is 999 blocks of 10,000. Tax = $250 + 999 × $85 = $85,165. Method details: authorized shares. This is calculated from the State's rates; it is not a State-published example.
Example (made-up numbers)
A seed-stage company has 10,000,000 authorized shares, 8,000,000 issued, and $500,000 in total gross assets. - Authorized shares method: $85,165. - Assumed par value method: assets ÷ issued shares = $0.0625 per share; × 10,000,000 authorized = $625,000 assumed capital; that is under $1,000,000, so the tax is $625,000 ÷ $1,000,000 × $400 = $250, and the $400 minimum applies. See the steps (made-up; our reading of the calculator). The lower result, $400, would be the tax under the State's rule, if the report supplies the required figures.
Practical takeaways
- Do not rely on an old default figure; recompute each year with current assets.
- Report issued shares and total gross assets so the lesser method can apply.
- An advance notice may show a large amount: see notices.
- The $175 minimum applies only to the authorized shares method (5,000 or fewer shares); the assumed par value minimum is $400.
FAQ
Is the cap $200,000? Yes, or $250,000 for a Large Corporate Filer (§503(c)). A Large Corporate Filer is, broadly, a corporation with a class of stock listed on a national securities exchange and large consolidated revenues and assets (thresholds in 8 Del. C. §503(c)); its tax is fixed at $250,000 where it would otherwise be $200,000. A start-up is very unlikely to be one.
Should I cut authorized shares to save tax? That is a corporate law question; ask counsel (not covered).
What we could not verify
- Whether your own balance sheet figures fit the State's requirements for the assumed par value calculation (company-specific; ask a professional).
- 2027 rates: the State pages do not date amounts by year, so everything here is described as current rates; recheck on corp.delaware.gov.
- Any extension or grace period for the March 1 deadline: none was found in the sources read. 8 Del. C. §510 mentions further time for good cause, which is exceptional.
- Registered agent prices and comparisons: not researched here (no official source).
- LLC and limited partnership tax: only the June 1 due date is mentioned; we give no amount because the State's own pages were inconsistent. Check corp.delaware.gov.
Sources (official)
- Delaware Division of Corporations, Franchise tax calculator (read October 17, 2026)
- Delaware Division of Corporations, Pay taxes (read October 17, 2026)
- Delaware Code, Title 8, Chapter 5 (8 Del. C. §§ 502-514, statute text read) (read October 17, 2026)