Question

For a company incorporated in Delaware, is it possible to avoid its franchise tax if the company's income is very little?

Answer 1

1. No, Franchise Tax is the fee imposed by the state of Delaware for the right or privilege to own a Delaware company. The tax has no bearing on income or company activity; it is simply required by the state of Delaware to maintain the good standing status of your company.
2. The Franchise Tax for a corporation is based on your corporation type and the number of authorized shares your company has. The total cost of the Franchise Tax is comprised of an annual report fee and the actual tax due.

DC