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Support: What are the tax implications of my authorized shares?

author

Nancy Thanki

Updated 02 July 2021

The number of authorized shares is only a part of the equation. The par value for the shares is also necessary when calculating the value of a company. There is also the matter of how many of these shares have been issued as well as the gross assets. Delaware allows 2 different ways for corporations to calculate taxes:

https://corp.delaware.gov/frtaxcalc/

Many of our founders use the "Assumed Par Value Capital Method", not the "Authorized Shares Method". We have an article that explains this in more depth by breaking down the two choices:

https://capbase.com/delaware-annual-franchise-tax-the-abridged-version/

However, we are not a law firm or accounting practice so we are not able able to provide legal or accounting assistance so you may want to reach out to a local professional or to Delaware's tax division directly as well for further clarification.

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