Delaware Corporation Annual Report

The Corporation Annual Report in Delaware is a requirement by the Securities and Exchange Commission. All publicly-traded companies are required to send shareholders a yearly financial report describing the corporation’s business and operations for the year and assessing its prospects for the future.

In order to write an annual report, you must list all the business operations as well as the financial position of the company. They must be summarized and recorded because the annual report is a financial document that businesses provide to shareholders. It can also be used for potential investors and analysts. It is the best source of information about the business performance and financial well-being of a business.

All public companies are required to file comprehensive annual reports. These are offered to the Securities and Exchange Commission. Small businesses and non-profit organizations oftentimes prepare yearly reports to connect with customers but are not required to. They use these reports to provide information about past performance and future goals.

What Should be Included in an Annual Report

The annual report is an essential part of corporate reporting. Since the annual reports are based on specific legal requirements, there are specific items that must be included but they must report. Annual reports essentially provide an overview of the business over the past year. They involve the following sections:

Chairman’s Letter

The introduction to the annual report is usually an introduction and a letter from the chairman. Either the primary owner or the CEO of the company writes the letter providing a snapshot of any significant developments in the past year. This can also include the company initiatives and a brief summary of the financials. It is important to include any challenges the business faced, its successes, and insight into plans for growth. The table of contents should also follow the chairman’s letter.

Business Profile

The business profile involves the vision statement and mission statement. It should also include the following details:

  • Directors
  • Officers
  • Registered and corporate office
  • Investor profile
  • Products or services that are the main source of revenue for the business
  • Competitor profile
  • Risk factors of the business

Management Discussion and Analysis

When it comes to the management discussion and analysis section, it provides an overview of the business performance. This should be over the last three years and include profit margins, sales, and income.

Financial Statements

This is the most important part of the annual report. It allows current and future investors, shareholders, employees, and other business stakeholders to determine how the company has performed previously. It should also highlight the company’s ability to pay off its debts and its plans for growth. It should include:

  • Balance sheet
  • Cash flow statement
  • Income statement
  • Statement to shareholders

These statements will show all of the profit and loss in the past year, as well as how much earnings it has retained and the proportion of revenues to operational expenses. Other elements included in the annual reports are:

  • Notes to accounts
  • Details about the accounting policies
  • Comments by auditors regarding the financials
  • Disclaimers about forecasted income and expenses
  • Stories, infographics, and photographs

How to File an Annual Report

In order to file the annual report, it must be filed by an officer of the corporation. There are specific guidelines involved in filing an annual report. Be sure to determine the key message, finalize the structure and content, using a compelling design, and always plan in advance.

6 Steps to file an annual report in Delaware:

  1. Determine If You Need To File an Annual Report
  2. Find Out When the Annual Report is Due
  3. Complete the Annual Report Form
  4. File Annual Report
  5. Repeat the Process for the Other States Where You’re Registered to Do Business
  6. Set Up Reminders for Your Next Annual Report Deadline

How Much Does it Cost to File an Annual Report

There are fees associated with filing an annual report, but these vary from state to state and can be anywhere from $75-$500. In Delaware, the filing fee for filing an Annual Report or Amended Annual Report for exempt domestic corporations is $25. For an Annual Report or Amended Annual Report for non-exempt domestic corporations, the filing fee is $50.

When to File an Annual Report

You can find the annual report due date on the Delaware filing website. Some you have to file every year, some states you do not. Annual Reports are to be received no later than March 1st of each year.

What Happens if you Don’t
File an Annual Report?

If you do not file a Delaware corporation annual report you will receive a penalty for non-payment. Even if you have a late payment, the penalty is the same, $200.00. Interest accrues on the tax and penalty at the rate of 1.5% per month. Make sure you file your annual report on time by working with a business law attorney. A business law attorney knows the ins and out of creating and maintaining a business legally.

Why an Annual Report is
Important for Delaware Corporations

The annual report gives information about a company’s financial decision. It provides key insights into a company’s key achievements, as well as expectations for the coming year. The annual report can also help when it comes to presentations for shareholders, or for providing the company’s strategy for growth. Overall, it provides a plan for the current plan, as well as upcoming situations and goals for the company.

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