Franchise Tax for Series LLCs
Delaware allows the formation of Series LLCs, enabling founders to separate multiple businesses or assets under one master entity. But what happens when tax season comes around? Do you file and pay Franchise Tax separately for each series, or just once for the entire structure?
Here’s what you need to know about Delaware Franchise Tax treatment for Series LLCs in 2025.
Relevant IRC Codes & Definitions
While Series LLCs are governed by Delaware law, the IRS may treat each series as a distinct entity depending on how it operates.
- IRC §7701 – Defines entities for federal tax purposes. Each series may be treated as a separate taxpayer.
- IRS Notice 2010-38 – Allows each series of a Series LLC to be treated as a separate entity for federal tax purposes.
- IRC §162 – Deducts Franchise Tax payments as ordinary business expenses.
At the state level, Delaware does not require separate Franchise Tax filings for each series unless they operate independently and are registered as distinct entities.
IRS & State Form References
Federal Tax Filings:
- Form 1065 / 1120 / 1120-S may be required for each series, if treated as distinct under federal law.
- Each series may require its own EIN and accounting books.
Delaware Requirements:
- Only the parent Series LLC is registered with the Division of Corporations.
- One Franchise Tax and Annual Report is filed for the master LLC.
- $300 minimum Franchise Tax is due annually (as of 2025).
- Individual series are not separately taxed unless registered independently as entities.
Real-World Example
Case Study:
OmniHold LLC is a Delaware Series LLC with three business segments:
- Series A: E-commerce
- Series B: Digital Product IP
- Series C: Real estate holding
Each has separate books, EINs, and operations.
For Delaware:
- Only the parent LLC pays Franchise Tax and files the Annual Report
For IRS:
- Each series must file its own federal return based on separate activity
Conclusion: Delaware = One bill. IRS = Multiple filings possible
Step-by-Step: Managing Franchise Tax for a Series LLC
- Confirm that your entity is a Series LLC under Delaware law
- Ensure each series is tracked separately (if filing separate IRS returns)
- File one Annual Report and pay Franchise Tax for the master LLC
- Do not register series individually in Delaware, unless necessary
- Consult your CPA about IRS requirements for each series
- Track assets and liabilities separately to stay compliant with IRS Notice 2010-38
Conclusion
For Delaware, the Franchise Tax treatment of Series LLCs is simple: one registration, one Annual Report, and one tax payment. But when it comes to the IRS, each series could be considered its own taxable entity.
Knowing the difference is critical to staying compliant—and avoiding double work or missed filings.
Call to Action
Running multiple projects under a Delaware Series LLC?
👉 Book a strategic tax session with Anshul Goyal, CPA. We’ll ensure your master entity is compliant with Delaware—and every series is IRS-ready.
Disclaimer
This content is for informational purposes only and does not constitute legal or tax advice. While Delaware only requires one Franchise Tax filing for the master Series LLC, the IRS may treat individual series as separate taxpayers depending on operations, ownership, and financial separation.
Anshul Goyal, CPA EA FCA, is a U.S.-licensed Certified Public Accountant, IRS Enrolled Agent, and Chartered Accountant (India). He helps startups and Series LLCs structure operations, file correctly with both Delaware and the IRS, and maintain audit-ready books for every series.
FAQs (Top 5 High-Searched)
Q1. Do I have to pay Franchise Tax for each series in Delaware?
A1. No. Delaware requires only one tax payment and one Annual Report for the master LLC.
Q2. Can the IRS require separate returns for each series?
A2. Yes. If each series operates independently, it may need its own EIN and tax return.
Q3. What is the minimum Delaware Franchise Tax for Series LLCs?
A3. $300 for the master LLC as of 2025.
Q4. Can I register each series as a separate Delaware entity?
A4. Yes, but this is not required and will result in multiple filings and higher costs.
Q5. Can I open separate bank accounts for each series?
A5. Yes, and doing so is often necessary to maintain liability protection and IRS compliance.
About Our CPA
Anshul Goyal, CPA EA FCA, is a U.S.-licensed CPA, Enrolled Agent with the IRS, and Chartered Accountant (India). He specializes in Delaware and federal compliance for complex structures like Series LLCs, and has advised over 2,000 clients on minimizing Franchise Tax and maintaining IRS alignment for multi-stream businesses.