Each year, business entities across the country file annual reports with the states where they’re registered to do business.
The annual reports due to the state are different than taxes and not the same “annual reports” corporations give shareholders; they serve as a way for states to do an inventory check on active businesses in operating in their borders. If a business completes the report and pays the annual fee, their business entity will remain active. However, if a business entity doesn’t file its annual report with the state, eventually the entity will be dissolved. For this reason, it’s important to make sure your business’ annual report is filed in a timely manner.
What are the requirements for my annual report?
Depending on your type of business of business entity and where you operate, you will have different reporting requirements. As a general rule, businesses file an annual report with the secretary of state (or corresponding state government office) on a yearly basis, but states may have different annual report due dates. Some states only require biennial, decennial, and random reports. It simply depends in which state your business is filed.
Some states send reminders (often a postcard) when your reporting due date is approaching. This reminder, should you receive one, will go to your business’ registered agent—so you’ll want to make sure whoever you list as your registered agent is responsible.
Nonprofit corporations usually must file an annual report, and in addition, a report or renewal must be filed for charity registration in order for them to continue accepting donations from the public (Idaho, Indiana, Montana, Nebraska, South Dakota, Nevada, Texas, and Wyoming do not require charities to register with the state).
In most states, annual reports are a straightforward affair and require basic company information like business name, registered agent name, and a reiteration of other information on the business’ formation documents. There is also a fee and/or tax required in most states. South Carolina doesn’t require corporations or LLCs to file reports. New Mexico, Ohio, Missouri, and Arizona do not require LLCs to file annual reports.
If you are conducting business in another state, other than the one where you formed your corporation or LLC, you will also need to file reports in those states as well. Foreign entities generally must file reports in order to continue operation in the foreign state.
Failure to file
A number of things could happen if you don’t file these reports for your business. You could lose the ability to conduct business, your business might accrue late fees and other penalty fees, and you will go out of good standing with the state. Good standing is important for many reasons, such as being able to operate in other states and countries. Basically, it’s just a good thing to stay on top your reports.