Authorized Shares vs Assumed Par Value Capital Method
The two Delaware franchise tax methods an eligible par-value domestic corporation should compare before paying.
Summary
Delaware publishes two main calculation methods for domestic stock corporations: the Authorized Shares Method and the Assumed Par Value Capital Method. The state says to use the method that results in the lesser tax, but the lower calculation still must respect minimum taxes, maximum taxes, and official portal facts.
Delaware says to use the method that results in the lesser tax.
| Authorized Shares minimum | $175Current Delaware minimum for the Authorized Shares Method. |
|---|---|
| Assumed Par minimum | $400Current Delaware minimum for the Assumed Par Value Capital Method. |
| Ordinary maximum | $200,000Large Corporate Filers are a separate flat-tax lane. |
Authorized Shares Method
The Authorized Shares Method starts from the number of authorized shares. Delaware's published tiers can make this method look high for startups that authorized millions of shares even if the company has low assets.
Assumed Par Value Capital Method
The Assumed Par Value Capital Method uses issued shares, including treasury shares, and total gross assets from the federal return balance sheet context. For par-value stock classes, the calculation compares each class par value against the assumed par value.
Minimums and maximums still apply
The lower method is not always a tiny bill. Delaware publishes a $175 minimum for the Authorized Shares Method, a $400 minimum for Assumed Par Value, and a $200,000 ordinary maximum unless the company is a Large Corporate Filer.
What the product does
Delaware Franchise Desk shows the two published methods from facts the user enters. It does not tell the user what legal or tax position to take, does not alter state balances, and does not file through the state portal.
Common questions
Which Delaware franchise tax method should I use?
Delaware states that the corporation should use the method resulting in the lesser tax. The product compares the two methods from user-entered facts, but the official portal determines the final balance.
Why is the Assumed Par minimum higher?
Delaware publishes a $400 minimum for the Assumed Par Value Capital Method, compared with a $175 minimum for the Authorized Shares Method.
What inputs does Assumed Par Value need?
It needs all issued shares, including treasury shares, and total gross assets from the relevant Form 1120 Schedule L context.
Can I use this if stock has no par value?
No. This product hard-stops no-par stock because Delaware's public calculator is limited to stock with par value and points no-par cases to a Franchise Tax Specialist.