Along with the excitement and fulfillment of starting and running a business come business compliance responsibilities. For many businesses, filing annual reports is among them. If you operate your business as an LLC or corporation (depending on the state in which your company is registered), you may need to publish an annual report to keep in good standing with the state.
Also known as “statements of information,” annual reports serve the purpose of keeping the state in the know about your company’s vital information.
These state-mandated annual reports apply to LLCs and corporations of all sizes. They are relatively short documents (unlike the other type of annual report that publicly held companies must produce to comply with U.S. Securities and Exchange Commission rules).
Does your business need to produce and file an annual report?
Not every state requires annual reports. For example, Arizona doesn’t mandate them for either LLCs or corporations. In Idaho, both LLCs and corporations need to file them every year, while in Pennsylvania, LLCs and corporations need to file them every ten years.
With that level of variance from one state to the next, you don’t want to make assumptions! Take the time to check with your state’s Secretary of State office to find out for certain if annual reports apply to you and what your state’s deadlines are.
What type of information goes into an annual report?
If your business is one that needs to submit an annual report, you’re probably wondering what you need to include in it. Fortunately, annual reports tend to be straightforward and uncomplicated.
Common elements of a state-required annual report include:
- Your business’s name and address
- Names and addresses of officers and directors (if a corporation)
- Names and addresses of managers or members (if an LLC)
- Name and address of your registered agent.
- Type of business your company is involved in.
How do you file your annual report?
You will need to complete your state’s form and submit it, along with any filing fees that apply. Depending on the state in which you have registered your business, you might also have to pay other business taxes when filing your annual report. In most states, you’ll be able to file your paperwork online.
If you’re not comfortable completing your form or filing it on your own, consider asking your attorney or an online business document filing service (which might be a more cost-effective way to go) to assist you.
What happens if you don’t file your annual report?
If you fail to file your annual report—or file it after the deadline—you could face some unattractive consequences. Make sure you find out what information you need to submit and when you need to submit it to avoid late filing fees, jeopardizing your good standing with your state, or even possible suspension or dissolution of your business.
A Few Final Notes About Annual Reports
Because it’s easy to lose track of when annual reports are due, I recommend you mark the due date for yours on your calendar so it won’t slip by you. You may need a little help with keeping deadlines on the radar if your business is registered in more than one state and you must file annual reports in multiple states. To make it easier for you, consider enlisting the help of a company specializing in business compliance to send you reminders.
Preparing annual reports isn’t rocket science, but the stakes are high if you neglect to fulfill your responsibilities. Make sure you stay on top of them, as well as your other business compliance obligations.