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Annual Reports in Virginia

How to Start an LLC

Forming an LLC in Virginia can be done effectively by following best practices, such as understanding the requirements, associated fees, and knowing how to conduct a thorough name search, as well as crafting an operating agreement. Researching to decide the best structure to benefit your business, whether a Single Member LLC or an anonymous LLC, is essential. Forming an LLC also entails being aware of several responsibilities, one of which is the annual report. Apart from fulfilling tax obligations, the Annual Report serves as a means of maintaining compliance to ensure asset protection. This article explores the intricacies of Virginia's LLC Annual Report requirements and provides insights into its significance for your business's taxes.

What is an LLC?

A limited liability company (LLC) is a business structure in the United States whereby the owners are not personally liable for the company's debts or liabilities. Once you’ve established your LLC, you must comply with several legal requirements to maintain your LLC and keep it in good standing with Virginia’s State Corporation Commission. This includes the yearly filing of an annual report that summarizes your business operations over the past year.

What is an Annual Report?

Every state has unique limited liability company (LLC) laws with different requirements for filling out the annual report. LLC annual reports are not the same as the detailed financial statements corporations release yearly to analysts, regulators, and analysts. Instead, an LLC annual report gives general information and facts about your business. This can include your registered agent’s name and address. It also provides information about your business activities that occurred the previous year. An annual report is intended to provide shareholders or other individuals with information on your financial performance and business activities.

Virginia requires you to file this report annually. You must submit an LLC annually to update business information readily available to the public. Many details of a company can change within a year. States also utilize the information included in this report to decide how much franchise tax a given LLC may owe.

In general, the information that is included in the annual report consists of the following information:

  • The principal business address
  • Member/ manager names and addresses
  • Identification numbers such as the state entity number
  • Business purpose
  • Authorized signatories
  • Information about your registered agent

Filing this report with Virginia’s State Corporation Commission allows your business records to remain up to date and changes with any LLC officers or registered agents can be promptly updated. Furthermore, creditors or other interested individuals can look up your contact and business information. The government also uses this information to determine whether you have paid your LLC state taxes.

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How do I file my annual report?

You file your annual report with Virginia’s State Corporation Commission on their Clerk’s Information System. You must have your LLC file number on hand. State agencies use this unique nine-digit number to identify your business entity and for taxation purposes. You can find this information by performing a business entity search. The link to do so can be found here.

Although there is no fee for filing an annual report, you need to pay an annual registration fee as an LLC in Virginia. The fee can vary depending on your type of business. For LLCs, the fee is $50 and is due on the last day of the month your business was organized. You can browse the State Corporation Commission site to check other business types and their associated annual registration fees.

When is the annual report due?

In Virginia, the annual report is due on the last day of the month that your LLC was registered with the state. Note that it must be the last business day of the month. So if the last day of the month falls on a weekend, you will have to file it sooner. For instance, if your company was formed on January 10th, you must file your annual report by the 31st of each subsequent year. However, if that day falls on Saturday, you must have it submitted by the Friday before.

Note that the Commission in Virginia prepares your Annual Report form two months before the due date. You can submit it any time then. You will not be able to submit it earlier than two months before the due date.

What are the penalties if I file my annual report late?

If you don’t file your annual report by the end of the month your LLC was created, your business will no longer be in good standing in Virginia. You will have five months to file your report. If you fail to file past this deadline, this will result in your company’s termination.

Do I need to use a registered agent professional service?

Although not required, having a registered agent professional service may provide several benefits, including avoiding late fees. The job of a registered agent is to receive and send any legal documents on behalf of your LLC. This can ensure that your documents are filed on time, including your annual report. The main advantages of utilizing a registered agent are listed below.

  1. Prevent late penalties: If you do not file your annual report, the Commission can dissolve your LLC. The registered agent is responsible for alerting you of any deadlines and may even submit the annual report.
  2. Improved flexibility: Having a registered agent service available during standard business hours to receive legal documents can help you focus on your business activities.
  3. Privacy maintenance: Rather than listing yourself as a registered agent, using a service can help maintain your privacy. Instead of your address or the business address listed for public access, your registered agent will be listed. If someone were to sue your LLC, the lawsuit would be sent to your registered agent rather than your business, which customers may see.

In addition, if your registered agent has changed, you can make this correction on the annual report you submit.

What are franchise taxes?

Annual reports are often used to calculate how much franchise tax you owe. States impose a franchise tax on businesses for the opportunity of organizing or registering to transact business in Virginia. In other words, this is a fee for the state providing your company with the statutory authority for your LLC to operate and claim benefits that come with an LLC.

Franchise taxes are typically due around the same time you file your annual report.

In summary…

The filing process for an annual report is not complicated but can take considerable time. It can also be challenging to balance deadlines to file these annual reports with your business responsibilities, primarily if your LLC operates in multiple states. To make sure you are on top of these deadlines, make sure you mark your calendar, or you can use a registered agent service as mentioned above. A registered agent service can provide peace of mind knowing that all your reports are filed promptly and accurately.

If you need additional help with filing your annual report, the State Corporation Commission has a how-to guide on the steps to filing an Annual Report in the Clerk’s Information System.