Prepare The Delaware Annual Filing

Prepare the Delaware Annual Filing

Every Delaware C-corp owe franchise-tax filing + annual report by March 1. Default online calc use Authorized-Shares, quote scary number - often $75K+ for standard 10M-authorized-share startup. The Assumed-Par-Value-Capital method almost always produce much lower tax (often $400-$1,000 small startup). Run both, flag savings.

When to use

• "Prep my Delaware annual report for {year}."
• "Delaware franchise tax is coming up."
• Triggered by track-deadlines-and-signatures (scope=deadlines) when March 1 deadline enter 90-day window.
• Founder got scary invoice from Delaware, want recalc.

Steps

1. Read shared context. Read context/legal-context.md. If missing or empty, ask the user in plain language: "I need a few basics about your company first (state of formation, authorized shares, directors). Want to set those up now?" Then run set-up-my-legal-info if they say yes. Stop until that's done.

2. Read config. config/entity.json - confirm stateOfIncorporation === "DE". If not, respond: "This only applies to Delaware entities; your entity is registered in {state}." Stop.

3. Gather filing inputs. Read from legal-context.md:

   • Entity legal name
   • File number (Delaware state file number, 7 digits)
   • Authorized shares (per share class: common + any preferred)
   • Par value per share (typically $0.0001 or $0.00001 for startups)
   • Registered agent name + address
   • Formation date

   More inputs for recalc (ask founder if missing, one at time):

   • Issued shares as of fiscal year-end (per class). Pull from composio search cap-table (Carta / Pulley); if not connected, ask.
   • Gross assets as of fiscal year-end (from balance sheet - total assets line). If pre-revenue with <$50K in bank, usually just "cash on hand".
   • Directors - name + title each board member.
   • Officers - name + title each (President, Secretary, Treasurer minimum; sole-founder typically hold all three).
   • Principal place of business - address (founder home office or registered-agent address OK).

4. Run both franchise-tax calculations.

   Method A - Authorized-Shares (default, usually higher):

   • ≤ 5,000 shares: $175 flat (minimum).
   • 5,001-10,000 shares: $250 flat.

   • 10,000 shares: $250 + $85 per additional 10,000 shares (or fraction), capped at $200,000.

   • 10M-authorized-share startup → ~$85,165 under this method.

   Method B - Assumed-Par-Value-Capital:

   1. `assumedParValueCapital = (grossAssets / totalIssuedShares)
      • totalAuthorizedShares`.
   2. Tax = $400 per $1,000,000 of assumedParValueCapital (minimum $400; maximum $200,000).
   3. 10M-authorized, 8M-issued, $100K-gross-assets startup → (100000 / 8000000) * 10000000 = $125,000 assumed par value → tax $400 (hit floor).

   Pick lower of A and B. Delaware statute explicitly allow Assumed-Par-Value-Capital election. Cite 8 Del. C. §503.

5. Show both numbers + savings. Example call-out:

   "Default Authorized-Shares method: $85,165. Assumed-Par-Value-Capital method: $400. Savings: $84,765. Elect Assumed-Par-Value-Capital on the filing form - there's a radio button on the Delaware portal for this."

6. Assemble submission package. Write single markdown file to annual-filings/de-{year}.md with:

   • Summary - entity, year, total due (lower of methods A/B), election being made, deadline (March 1, {year}).
   • Calculation detail - both methods, inputs, result.
   • Annual report content - entity name, file number, principal place of business, phone, directors (name + addr), officers (name + addr + title), issued shares.
   • Step-by-step portal guide - URL (https://corp.delaware.gov/paytaxes/), log in with entity file number, select annual report + franchise tax, enter officers + directors, select "Assumed Par Value" on franchise-tax election radio, enter gross assets + issued shares, pay.
   • Late-fee warning - $200 late fee + 1.5% monthly interest; failure two consecutive years → entity declared void.
   • Reminders - registered-agent renewal (separate bill from agent), annual board consent (separate process).

7. Write atomically (*.tmp → rename).

8. Append to outputs.json - { id, type: "annual-filing", title, summary, path, status: "draft", createdAt, updatedAt, attorneyReviewRequired }. Flip attorneyReviewRequired: true if cap table has anything unusual - unconverted SAFEs / convertibles, multiple preferred classes, shares issued at non-standard par, founder stock not yet issued on ledger, or any discrepancy between cap table and board-consented issuances.

9. Mark calendar row done once founder confirms filed. Update deadline-calendar.json type: "delaware-franchise-tax" row → status: "done"; next year row seed on January 1.

10. Summarize to user. Plain language. Show both tax numbers, the savings, the March 1 deadline, the link to the Delaware filing site, and a one-liner: "I've laid out exactly what to enter. Go to that page when you're ready and follow the steps." Never name files or paths.

Outputs

• annual-filings/de-{YYYY}.md
• Appends to outputs.json with type: "annual-filing".