After forming a Limited Liability Company (LLC), there are important reporting and tax filing requirements in order to maintain compliance in your state. One of these requirements is to complete and file what is most commonly known as an Annual Report.
What is an Annual Report for an LLC?
Many states require LLCs to file annual reports with the state. An annual report includes details regarding a company’s activities throughout the prior year of business.
The name and requirements for an LLC annual report vary by state. While this report is typically referred to as an annual report because most states require that such report is filed every year, your state may call this report by a different name, such as: the Biennial Statement, Decennial Report, Statement of Information, Periodic Report, or other name. To find out whether your state requires an annual report for your type of entity, visit the website for the state government agency where you filed your formation documents.
In most states, you are required to file this report through the Secretary of State’s Office. However, some states, such as Texas, require LLCs to file an annual report and Franchise Tax together through the Comptroller of Public Account’s website. Other states may not require a report at all, but only an annual tax, like Delaware.
The purpose of this report is to keep your company information current so the public, investors, and other parties have the information necessary to locate and communicate with companies conducted business in the state.
Sole proprietors do not have to file an LLC annual report.
What is Included in an Annual Report
Although the contents of the report are different depending on the state, you can expect the following information to be required:
- The principal business address of the company
- The names and addresses of the managers and members of the LLC
- Important identification numbers for your business
- The purpose of your business
- The names and addresses of the registered agent
The annual report won’t require the submission of financial reports or financial statements as those are not publicly disclosed documents.
How to File an Annual Report
Most states offer the option to file by mail or online. Regardless of the method you use, be sure to make a copy of the report for your records before submitting or mailing it to the State.
In addition to filing the report, there is also a required fee. While the amount varies from state to state, you can expect to pay an annual filing fee ranging from $9.00 – $800.00.
When to File an Annual Report
The timeline to file reports varies greatly between states. Some states truly do require annual reports once a year, while others require submission of such reports be made every two years or even every ten years.
The filing deadline in some states is set on a predetermined date for all entities, while other states set the deadline based on the date of formation.
Your state agency responsible for business filings should have all necessary deadlines for your type of entity on its website. Some states may mail reminders to you prior to the report deadline, but not all states do. Even if your state does typically send reminders, failure to receive a reminder does not excuse you from the consequences for untimely filing.
Using a formation company such as IncFile offers free email alerts when it’s time to file your LLC annual report.
Failure to File
Failing to file an LLC annual report may result in steep fines, penalties, and taxes. Additional consequences are loss of your business’s status of “good standing” within the state and forfeiture of business registration.
A loss of “good standing” can affect your company’s ability to conduct business in the state in many ways. Your company could lose a contract bid, as well as limit your financing options with many lenders who require a Certificate of Good Standing.