What are the Authorized Shares tax brackets?
The statute sets two flat tiers and then a per-block rate. Any fraction of a 10,000-share block counts as a full block — 10,001 shares costs the same as 20,000.
| Authorized shares | Base tax | Total with $50 fee |
|---|---|---|
| Up to 5,000 shares | $175 | 5,000 shares → $175 + $50 fee = $225 |
| 5,001 – 10,000 shares | $250 | 10,000 shares → $250 + $50 fee = $300 |
| 10,001 – 20,000 shares | $250 + 1 × $85 = $335 | 15,000 shares → $335 + $50 fee = $385 |
| Each further 10,000 shares or part | +$85 per block | 100,000 shares → $1,015 + $50 fee = $1,065 |
| 23,510,000 shares and above | $200,000 (capped) | Capped → $200,000 + $50 fee = $200,050 |
Tax = $250 + ceil((shares − 10,000) ÷ 10,000) × $85, capped at $200,000, plus $50
Worked examples: what startups actually owe under this method
| Authorized shares | Block math | Total due | Typical APV total | Pay which? |
|---|---|---|---|---|
| 5,000 | Minimum tier | $225 | $450 | Pay Authorized Shares |
| 10,000 | $250 base | $300 | $450 | Pay Authorized Shares |
| 100,000 | $250 + 9 × $85 | $1,065 | $450 | Recalculate (APV) |
| 1,000,000 | $250 + 99 × $85 | $8,715 | $450 | Recalculate (APV) |
| 5,000,000 | $250 + 499 × $85 | $42,715 | $450 | Recalculate (APV) |
| 10,000,000 | $250 + 999 × $85 | $85,215 | $450 | Recalculate (APV) |
| 15,000,000 | $250 + 1,499 × $85 | $127,715 | $450 | Recalculate (APV) |
APV figures assume $250,000 gross assets and half the authorized shares issued — your number comes from the Assumed Par Value guide or the calculator.
Where does the $200,000 cap kick in?
Solve $250 + blocks × $85 = $200,000: that is exactly 2,350 blocks, or 23,510,000 authorized shares. Every share above that is taxed at $0 under this method — the notice reads $200,000 plus the $50 fee, or $200,050 total. Public companies past that line with exchange-listed stock and $750M+ scale may instead be fixed at $250,000 as Large Corporate Filers (reached at about 29.4 million shares under this method). Details in our Large Corporate Filer guide.
When should you just pay the Authorized Shares amount?
When your authorized pool is 10,000 shares or fewer, this method usually wins: $225 total at 5,000 shares and $300 at 10,000 shares both beat the $450 Assumed Par Value minimum. Closely held companies and holding corporations often sit in these tiers deliberately. Above that, run both methods — the interactive calculator does it in under a minute — and file the lower figure on the annual report.
Authorized Shares FAQ
How is Delaware franchise tax calculated under the Authorized Shares Method?
Start with $175 for the first 5,000 authorized shares or $250 for 5,001–10,000 shares. Above 10,000 shares, add $85 for each additional 10,000 shares or fraction thereof: $250 + ceil((shares − 10,000) / 10,000) × $85. Add the $50 annual report fee. The base tax cannot exceed $200,000 ($250,000 for Large Corporate Filers).
At how many shares does the Delaware franchise tax hit the $200,000 maximum?
At 23,510,000 authorized shares. That is 2,350 blocks of 10,000 above the first 10,000: $250 + 2,350 × $85 = $200,000 exactly. Any share count above that pays the same $200,000 base tax plus the $50 report fee, unless the corporation is a Large Corporate Filer ($250,000 cap, reached at about 29.4 million shares).
When is the Authorized Shares Method cheaper than Assumed Par Value?
When authorized shares are 10,000 or fewer. A 5,000-share company pays $225 total under Authorized Shares versus the $450 Assumed Par Value minimum ($400 + $50 fee). At 10,000 shares it is $300 versus $450. Above roughly 11,000 shares, Assumed Par Value almost always wins for companies with real assets and issued stock.
Why does Delaware send a notice based on the Authorized Shares Method?
Because the state only knows your authorized share count from your Certificate of Incorporation — it does not know your gross assets or issued shares. The notice therefore shows the Authorized Shares figure (e.g., $85,215 for 10 million shares). You are entitled under 8 Del. C. § 503 to file using whichever method produces the lower tax.
Does the $50 annual report fee apply under both methods?
Yes. The $50 annual report fee is added to the franchise tax regardless of method. That is why the true minimums are $225 ($175 + $50) under Authorized Shares and $450 ($400 + $50) under Assumed Par Value Capital.
Can a Large Corporate Filer recalculate under the Assumed Par Value Method?
No. Once the Secretary of State designates a corporation as a Large Corporate Filer under 8 Del. C. § 503(c), the tax is fixed at $250,000 and cannot be recalculated. See our Large Corporate Filer guide for the qualification tests.