Limited Liability Companies (LLCs) provide you with asset protection, business legitimacy, and tax planning strategies, but in order to gain these benefits, you must comply with the compliance requirements associated with operating an LLC. One such requirement is filing your annual report with the Secretary of State in each state in which your LLC is registered.
LLC annual reports are not the same as those filed by major corporations which contain comprehensive financial statements. Rather, the annual report that the LLC is required to file with the Secretary of State contains basic information and facts about the LLC such as the name of the registered agent, directors, and managers. Some states also collect certain financial information to assess the amount of franchise tax the LLC may owe.
Most states have a penalty for filing the annual report late. Additionally, so as long as the annual report is not filed, your company will fall out of “good standing” which means your LLC may affect your LLC’s ability to secure business loans, obtain contracts, expand operations, and bring a lawsuit in the state the LLC is registered, such as for breach of contract. Additionally, if you wait too long to file your annual report, the Secretary of State may administratively dissolve your company which will cause the LLC to lose its limited liability protection.
While each Secretary of State’s requirements for the annual report vary, typically, the annual report includes the following information:
The deadline to file the annual report varies from state to state and can even be different based on the entity type registered with the Secretary of State. The deadline to file the annual report is typically either on the anniversary of when the LLC was formed or based on a fixed date determined by the state. Recently, however, most states have been moving forward with requiring LLCs to file their annual reports with the Secretary of State during the LLC formation anniversary month. Additionally, while states formerly sent out reminders alerting LLC business owners that their annual reports were due, due to a reduction in resources, many states have moved away from these notifications.
If you sign up for our registered agent services, we will remind you when your annual report is due and can even file it for you if you choose.