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It’s good that you have a corporation or LLC, which means you offer protection for your personal assets when you’re running your small business. But maintaining a corporation or an LLC comes with many obligations. To maintain your corporation’s good standing with the state, you have to file your annual report on time.
The Annual Report is basically a brief document with the required current information regarding your corporation. Here, you have the name of the business, the address of the main office, the names of the people who run the business, and the registered agent tasked to receive official correspondence.
This document updates the state regarding the key information about your corporation, and it helps make sure that your corporation receives all important correspondence, including notice of lawsuits.
The specific details and requirements for filing an annual report may be different, depending on where you’ve registered your corporation. However, the basic steps are as follows:
Do You Need to File the Annual Report?
States may have different rules regarding the requirement for filing an annual report. There are states that require all types of businesses to file an annual report. Other states may not require an annual report filing, although this usually depends on what business structure you’re using.
In general, the rule is that you normally don’t need to file an annual report when you’re running a sole proprietorship.
But you may need to file an annual report for other types. These include corporations (C corporations or S corporations), limited liability companies (LLCs), limited partnerships, limited liability partnerships, and nonprofit organizations.
You should check your state’s Secretary of State website for the requirements regarding the annual report for your type of business structure. The information may also specify as to who in the corporation needs to file the annual report.
Just keep in mind that in some states, they may use another term for this report. California, for example, calls this document the statement of information.
When Is It Due?
As the name implies, in most states the annual report has to be filed every year. But it may be different in some states, even if these states persist on calling this document the “annual report”. It’s possible that you may only be required to file the annual report every two years, or even every 10 years.
As to the specific deadline for each year, it may also differ depending on the state you’re in. For some states, it may be the anniversary of the founding date of your corporation. This will be the date noted on your certificate of formation.
However, other states may just designate a single due date for all businesses, regardless of which date the businesses were formed.
You may also have a different sort of deadline for the initial report (the first annual report filed). In some cases, the deadline may be a specific time frame (like perhaps 3 months after receiving the filing of formation documents or receiving the certificate of formation).
It’s absolutely crucial that you’re not late when filing your annual report. Failure to do so may mean that your business isn’t in good standing with the state. You may end up paying exorbitant fines. The worst-case scenario (if you’re really late) is that the state dissolves your corporation without your approval.
This is why some online formation services and registered agent services may offer compliance services as part of their service packages. That way, they can notify you when it’s almost time to file the annual report, or any other document that the state may require. Sometimes the service may even be filing the annual report on your behalf.
How to File Annual Reports
Complete the Form
Visit the state business filing agency website of your state (usually the Secretary of State website) and you should be able to locate and download the form you need to fill up. The required information may differ depending on the state, but usually, you need to put in the following:
- The formal name of the business (as stated in the certificate of formation)
- The address of the business
- The names and addresses of the directors and corporate officers (for a corporation)
- The names and addresses of the members and managers (for an LLC)
- The name and address of the registered agent
- The type of business you’re in
File the Annual Report
Now that you’ve filled up the form, the next step is to submit it. Some states allow you to do this online. other states may require a snail-mail filing, which means you need to print out the form and then mail it to the proper office (as stated in the state business filing agency website where you downloaded the form).
Some states also require that you pay some kind of filing fee, including different types of business taxes. If you don’t pay the fees, then the filing won’t be completed.
Repeat the Process for Other States (If applicable)
It’s entirely possible that your business is registered in many other states. If that’s the case, then you’ll have to do the same steps for each state as well.
Final Word
It’s best that you have a professional service (like your registered agent service or your online formation service) assist you when you’re filing the annual report. It’s very easy to overlook this requirement, and these professional services will offer timely reminders. At the very least, use an app to remind you and the other directors of the deadline.
All in all, it’s actually a rather simple process. It may not even seem all that important at first glance. But failing to file the annual report can result in annoying fines and other business troubles that you don’t really need. You have enough problems trying to grow your corporation—you don’t need to add more to your troubles!