How Delaware Almost Hustled Me Out of $42,448 in Franchise Tax

I incorporated in Delaware. As you do — you read the startup playbook, Delaware is on the list, you use an online service, you check the box. Done. Moving on.

Except. The bill came.

$42,448. Franchise tax. For an inactive company with zero revenue. Zero employees. Zero revenue. A dormant C-Corp that had not shipped a product or invoiced a single customer.

Here's the thing the incorporation service doesn't explain: Delaware has two calculation methods. If you authorize millions of shares but never issue any — which is the default setup — Delaware taxes you on the potential, not the reality. Authorized Shares Method vs Assumed Par Value Capital Method. The difference between $42,448 and $659.

The fix took one morning and $100 in share consideration.

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