Filling Annual Reports for Your LLC

When you fail to submit the annual report of your LLC, you may end up paying late fees, losing the good standing, administrative dissolution or even incapable of enforcing contracts. This guide discusses the nature of LLC annual reports, their importance, and how to file such reports properly and the consequences of defaulting on a deadline.

What Is an LLC Annual Report?

LLC annual report is a report provided to the state to update or verify the basic information concerning your business. Although it is so named, it is not a financial report and neither does it contain any information regarding income or expense. Rather, it is a guarantee that the state possesses up-to-date and precise information regarding your LLC.

Such filing can be referred to as annual report, biennial report, statement of information or periodic report depending on the state. Whatever the name, the goal is the same so that your LLC will remain in good terms with the state.

The importance of Annual Reports

Annual reports are another thing which is very important in ensuring that your LLC is in legal existence. States rely on such filings to monitor the businesses which are under operation, verify the ownership and management information, and hold them accountable.

Maintaining limited liability: Filing on time means that the LLC will be in existence. Missing reports may put your business in an undesirable position making courts consider it as non-compliant that undermines the liability protection. Also, banks, investors and potential partners usually look into good standing status before transacting business with LLC.

What Information is contained in an Annual Report?

Although the requirements differ depending on the state, the majority of LLC annual reports contain simple business information. This is typically the legal name of the LLC, the main business address and the contact details of the registered agent.

Members or managers of LLCs are usually requested to provide their names and addresses depending on whether the LLC is member-managed or manager-managed. You might also be requested to identify your purpose of business and contact details of the individual making the report.

Other states demand that you report any changes whereas others just need you to confirm that any current information is up-to-date.

Annual reports of Are LLC When are they due?

The deadlines of the annual reports are strictly based on the state law. There are states that demand the filing every year and others demand every two years. The due date can be the date of the anniversary of the formation of your LLC, a specific calendar date, or the conclusion of with which fiscal year.

Due to the change of deadlines, one should pay attention both to the requirements of his/her state. Most states issue notifications of reminders, however, the use of reminders is not a safe option. Finally, the LLC has to ensure that it files in time.

The procedure to complete LLC Annual Report

In the majority of states, annual reports can be submitted electronically by the Secretary of State or other similar agency. Filing online is normally quicker, cheaper and offers instant feedback.

You will go into the business filing system of the state, view the current information of your LLC, update it where needed, and provide the report together with the Filing fee required. The charges differ depending on the state with a few dollars being charged to hundreds of dollars.

Once submitted you should retain a copy of the confirmation and report that has been filed with your business records.

What Would Happen with Missed Deadlines?

Failure to meet an annual report deadline may have dire consequences. There are late fees that are normally charged by states but they accumulate over time. In case the report is not filed, the state will indicate your LLC as being not in good standing.

Failure to comply can lead to the administrative dissolution, i.e. the state closes down your LLC. When your business is dissolved, you can lose the protection of liability, have problems opening bank accounts and cannot legally conduct business until reinstated.

Reinstatement can be normally carried out but is normally accompanied by fees and paperwork.

Annual Reports and Registered Agents

Annual reports usually make you verify or renew the information of your registered agent. In case your registered agent has been replaced, one of the most typical opportunities is the annual report which is your opportunity to update the state with this type of information.

Having proper registered agent is also important as it will make your LLC get legal notices and reminders on compliance.

Tips for Staying Compliant

To maintain the annual reports, it is necessary to be organized and consistent. Calculate the deadline and remind about it using set calendar applications long before the due date and update your contact data with the state.

When you have more than one state of operation, in your LLC, you should keep in mind that each state might have its own annual or biannual filing requirements. Several companies rely on registered agent or compliance services to observe due dates and maintain submissions by different areas.

Final Thoughts

One of the easiest yet important elements of the upkeep of your LLC is the filing of annual reports. The process can be seen as ordinary, but failure to consider it can cost a company a lot of money and result in severe legal repercussions.

By knowing what your state needs, submitting your filing on time and maintaining quality records, you would be ensuring that your LLC does not suffer disqualification, protection, and is instead position to expand. Consider annual reports as a normal business activity and you will avoid taking unnecessary risks but will leave your company in a good position every year.

Frequently Asked Questions