Dissolving a Delaware corporation: franchise tax first
What Delaware requires before a Certificate of Dissolution, why taxes keep running until you file, and the timing that avoids an extra year.
Summary
Our answer: before Delaware dissolves a corporation, it must have paid every franchise tax due, including the tax for the entire calendar month in which the dissolution takes effect, and filed every annual franchise tax report, including a final report for that year (8 Del. C. 277). Taxes keep accruing until the Certificate of Dissolution is filed. Timing matters: a dissolution that takes effect in January adds a short final report and tax for the new year on top of the previous year's report due March 1.
8 Del. C. 277: no dissolution until all franchise taxes through the calendar month of dissolution are paid and all annual reports, including a final one, are filed.
| Taxes required | Through the entire calendar month of dissolution8 Del. C. 277(1). |
|---|---|
| Reports required | All, including a final report for the year of dissolution8 Del. C. 277(2). |
| Until you file | Taxes keep accruingDelaware tax FAQ: until a terminating filing is received and filed. |
| Final-year tax | Prorated for the part of the year the corporation existed8 Del. C. 503(d). |
| Delaware Franchise Desk | Not for dissolutionSpecial-status workflows are outside the calculator. |
Our verdict
Once the decision to dissolve is made, the calendar matters: a dissolution effective before December 31 closes the last year with that year's report; one effective in January adds a short-year report and tax for the new year on top of the March 1 report for the year just ended. Each amount is the lesser of the two methods (503(a)), so compute both rather than paying the default notice figure.
Who this page is for, and who it is not for
For: founders closing a Delaware stock corporation that has no remaining operations. Not for: Delaware LLCs (different statute and tax), corporations already void for non-payment (revival first), and mergers or conversions, which have their own filings.
Timing example
A startup stops operating in October 2026.
| Dissolution effective | Reports and taxes to file first | Extra cost |
|---|---|---|
| December 15, 2026 | Final 2026 report and 2026 tax through December | None beyond 2026 |
| February 10, 2027 | 2026 report and tax, plus a final 2027 report and tax through February 2027 | About two months of 2027 tax and a second report |
Amounts depend on the method used; the minimums in 503(c) are written for a full taxable year.
Why this is outside our calculator
Delaware Franchise Desk handles the ordinary annual report of a par-value stock corporation. A dissolution adds a final short-year report, a certificate and conditions on the Secretary of State's side; we stop there rather than estimate a filing we do not prepare.
Next steps
Common questions
Do I have to pay Delaware franchise tax before dissolving?
Yes. Section 277 of Title 8 says no corporation shall be dissolved until all franchise taxes due or assessable, including those for the entire calendar month in which the dissolution becomes effective, are paid, and all annual franchise tax reports, including a final report for that year, are filed.
Does the tax stop when the company stops operating?
No. The Delaware tax FAQ says taxes keep accruing until a filing that ends the corporation's existence, such as a Certificate of Dissolution or of Merger, is received and filed.
Is the last year prorated?
Section 503(d) prorates the tax when the corporation was not in existence for the whole year, and Section 277 requires payment through the end of the calendar month of dissolution. A dissolution effective in February therefore carries roughly two months of tax for that year.
Can Delaware Franchise Desk prepare the final report?
No. Dissolution, merger, conversion and other special-status workflows are a hard stop in our calculator. File the final report and the certificate through the Division of Corporations or your registered agent.
Last ordinary report before winding down?
Our checker covers an ordinary annual report for a par-value stock corporation. The dissolution and the final short-year report are outside it.
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Official sources for this guide
Last reviewed: .