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One of the best business entities to start in the United States is an LLC (Limited Liability Company). If you have just formed one, you can start celebrating. However, you should remember that most states require an annual report to maintain the status of your LLC.
Different states have different requirements when filing your LLC’s annual report. However, they all require you to file a report to update the state government about the status of your business. Some charge a certain fee, while others do not.
An LLC’s annual report is different from the reports companies create from shareholders. These reports include expenditures, activities, income, and balance sheets. Here are important things to understand about your LLC’s annual report;
What is an Annual Report?
An annual report is a document whose purpose is to notify the state government of any changes that might have taken place in your LLC. By filing this report, you ensure that your LLC is compliant with state requirements and can keep operating without problems.
However, it is important to note that some states might not use the term annual report. Some states refer to these reports as periodic reports, statements of information, and annual statements, among other terms. No matter the name, they are all the same and standard for almost all states.
A typical annual report should have your company’s physical address, its name, and the name of the registered agent of your company. You might also be required to pay some fee, although this varies from one state to another.
How to File an Annual Report
As discussed above, different states have different requirements for LLCs to file annual reports. Some states might review these regulations annually. You, therefore, need to find out from your state to ensure that you have the updated requirements.
Depending on your state, you will find out the following;
- When to file your LLC’s annual report: Some states, such as Indiana, Lowa, and California, require LLCs to file annual reports once every two years. Pennsylvania requires LLCs to file these reports once every ten years.
- Whether it is a requirement: A bigger percentage of American states require LLCs to file annual reports. However, states such as South Carolina, Ohio, and Delaware do not require one.
- When to turn in your annual report: There are dates set for you to turn in your annual report. Again, these dates vary from one state to another. Some states set a date for all LLCs. Others provide a range of weeks or months. We also have states that require LLCs to file annual reports on their anniversary.
- Any other documents required: Some states might provide you with specific forms to fill out depending on the type of LLC you are running. Others have specific documents for those who have made changes to their LLCs.
- Getting the forms: Filling out the required forms is easy in almost all states. You can find the required forms online in most states. However, some states might require you to fill out physical forms and deliver them to the states’ secretaries.
Consequences For Not Filing an Annual Report
It is a requirement in most states to file an annual report. Doing this is important to ensure that your LLC is in good standing with the state government. Consequences for not filling out an annual report or filing business taxes vary from one state to another. Some of them might include;
- Forfeiting the registration of your company.
- Forfeiting the protections and status of your LLC.
- Shutting down your LLC.
- Fees or penalties.
- Loss of credit lines and loans.
- Personal operating license cancellation.
Fees Required to File an Annual Report
It is important to note that you might be required to pay some fees depending on your state of operation. The fees vary from one state to another. If you file the annual report online, you can pay using a credit card when submitting the forms.
Some states might not have an online portal for the submission of the forms. In such states, you are required to mail or physically present the forms to the state’s secretary. Ensure you have made the required payment using a money order or a check.
Depending on your state, you might pay nothing, as low as $10 in states such as Colorado, and as high as $3,000 in states such as Tennessee that require each LLC member to pay $50 annually.
Filling an LLC annual report is important if you want your company to remain operational and in good books with the state government. If you understand the things discussed above, you will find it easy to file your company’s annual report.