Understanding state annual report requirements

Annual report filing requirements

One requirement imposed by the state corporation and LLC statutes is for corporations and LLCs to file an annual report in the formation state and every state where they are qualified or registered to do business. This requirement usually begins the year after formation or foreign qualification and continues until the corporation or LLC has formally dissolved in the formation state or withdrawn from the foreign state. Other statutory entities, such as limited partnerships and limited liability partnerships, are subject to an annual report requirement as well.

These are general rules. Some states require a report every other year instead of annually. A few do not have any information reporting requirements for some entity types. And some require an initial report within a short period of time of formation or foreign qualification.

Also, the information required to be set forth in an annual report differs from state to state. In fact, it can also differ within a state from business entity type to business entity type.

The business entity statutes prescribe the minimum required content. The filing office may be authorized to require additional information that will aid in the filing process. Typically, however, the annual report must include, at a minimum:

• The company’s legal name
• In the case of a foreign company, the fictitious name it qualified under, if any
• The principal office address in the state, if any
• The principal office address wherever located
• The registered agent’s name
• The registered office address
• The names and business addresses of directors and officers (for a corporation), managers and members (for an LLC) or partners (for an LP or LLP)

Filing details for annual reports

The states also vary greatly when it comes to filing details. For example:

• Due dates. Some states require annual reports to be filed before a fixed calendar date. Other states have a due date based on the anniversary of formation or qualification.
• Forms. Some states prepare forms for each company, preprinted with the most current information on file. Others provide blank forms that must be filled out. In states with online filing, the information is typed directly into the filing office’s website.
• Filing method. In some states, the information report may be delivered to the filing office in paper form or electronically. Others will only accept reports that are filed electronically. 
• Fees. Most states require a filing fee to accompany the report. The fee may be a flat rate or it may be variable. A variable rate may be based on a corporation’s authorized shares, the number of an LLC’s members or an LP or LLP’s partners, or some other basis. Some states charge nonprofit corporations no fee or a reduced fee. Some states have different fees for online filing and paper filing.
• Special requirements for certain types of companies. Some states have separate requirements for certain types of companies, or companies involved in certain types of businesses. For example:
  • Illinois - An entity that files Form EEO-1 has to attach a copy of the Workplace Demographic Data portion of the form to its annual report 
  • Indiana - Health care entities must include beneficial ownership information
  • North Dakota - Requires farming and ranching corporations and LLCs to file a different annual report than other corporations and LLCs.

What is the filing deadline for annual reports?

Knowing that you have to file is one thing. Keeping track of when you need to file can be something else entirely. This is because the time period for filing (or e-filing) the annual report varies widely from state to state. When multiple states are involved, it gets confusing in a hurry.

For example, Rose’s Buds Inc. is incorporated in State X. The business has grown steadily, and the company filed for foreign qualification in State Y and State Z.
Question: What annual report deadlines must Rose's Buds Inc. track?

Answer: Rose’s Buds Inc. must track the deadlines in all three states: State X, State Y, and State Z.

State X requires that Rose’s Buds Inc. file an annual report within the 60 days immediately prior to the first day of the anniversary month of incorporation. State Y requires a foreign corporation to file its annual report during the first quarter of the calendar year, regardless of the qualification date. And State Z requires a biennial report filing on April 1 of even-numbered years.

Consequences of a late filing

Filing after the statutory deadline will typically require the payment of a late fee, and perhaps interest, in addition to the regular filing fee. In addition, until the report is accepted, the corporation or LLC may be listed on the public records of the state as being “delinquent” or not in good standing. That is a status that potential business partners or lenders can see. And if the state will not provide a certificate of good standing, that can delay business transactions or attempts to qualify in foreign states. So, the best practice is not to file late. But if the corporation, LLC or other entity does miss the deadline it’s best to file as soon as possible thereafter and promptly correct any issues if the filing is rejected.

What happens if I don't file a required report?

Non-compliance with the annual report requirement can also result in the administrative dissolution of a domestic company and the administrative revocation of the authority to do business as a foreign company, which means losing the many benefits of operating as a statutory entity like an LLC or corporation. How long the non-compliance must continue before the state begins dissolution or revocation proceedings varies by state. Note that in some states it only takes one year of not filing to begin these proceedings. (The states will provide notice and a chance to comply before actually administratively dissolving or revoking a company.)

Additional key considerations for annual report compliance

Missing a report deadline can impact financing. A company that misses the deadline could lose its “good standing” status with the state, which can limit its financing options. Many lenders and funding sources may require good standing status, and they’ll ask you to prove it by producing a certificate of good standing.

Failing to file can lead you to lose a contract bid. A failure to file, and the resulting loss of good standing, could cost a company the bid — as contracting authorities may require proof of good standing status.

Annual report filing requirements continue even if you stop doing business. Even if a corporation or LLC stops doing business it still has to file its annual report in its domestic state until it formally dissolves. In addition, a corporation or LLC that stops doing business in a state in which it had registered to do business as a foreign entity, still has to file there until it properly withdraws from the state. Otherwise, there could be failure-to-file penalties.

Filing your state income tax return does not take care of your annual report requirement. Having to file an annual report with the Secretary of State (or equivalent office) and having to file an income tax return with the state tax department are different compliance requirements. Even if one has already been filed, the other still needs to be filed.

You still need to file an annual report, even if you've never received a notice. Although some states send reminder notices, not all do. Either way, you still have to file any required annual reports. The burden is on you to keep up with your deadlines and file on time.

Having a business license does not do away with your annual report filing requirements. Having to obtain or renew a business license with the state or local agency regulating your business and having your corporation or LLC have to file an annual report with the Secretary of State (or equivalent office) are separate compliance requirements. Even if a company has all the necessary business licenses, it still needs to file its annual reports.

Avoid these common annual report filing mistakes

It’s not enough to just deliver your annual report to the filing office on time. You also want to avoid making mistakes that can result in the rejection of your filing. Some common mistakes in any state include the following:

• Filing a report with missing or incorrect information
• Submitting the wrong form or an outdated version of the right form
• Paying the incorrect fee or using an incorrect payment method
• Execution errors, such as failing to sign or date the report or having the report signed by someone not on the state’s records as authorized to sign

It’s also important to know the specific requirements that some states have. Failure to comply can result in rejections. Here are some examples:

• North Carolina requires a paper filing if the registered agent is being changed

• New York advises that the biennial statement should not be filed before the calendar month in which the statement is due
• Delaware may reject a filing if a corporation fails to specify the nature of its business, or improperly lists its registered office address as its principal office

Making it even harder to avoid mistakes is that the states often change their requirements. Due dates change, fees change, paper filings may be eliminated, and so forth.

It’s also important to carefully complete the annual report form. If there are errors, such as spelling mistakes, that may not cause a rejection, but you will still want to correct the mistake and may have to file an amended report.

Tips to Simplify Annual Report Compliance

Annual report compliance can be an administrative burden, especially when there are multiple entities and multiple states involved. The following practices can help ensure compliance and keep your entities in good standing.

• Build a state-by-state compliance calendar that captures each entity’s due date
• Centralize core entity data (legal name, principal office, registered agent/office, and officer/manager details) so updates flow into filings consistently.
• Confirm acceptance, not just submission.
• Monitor state changes (forms, fees, due dates, delivery methods, and special requirements)

Another option, which can further reduce the administrative burden, is to use an annual report managed service, instead of doing those tasks yourself. CT’s Annual Report Managed Service (ARMS) tracks, prepares, and files your company’s annual reports with the appropriate state agencies, ensuring that entities remain in good standing. It maintains corporate data, monitors due dates, prepares the filings, advances the fees, submits the annual reports, tracks reports, and confirms submission status. CT also has dedicated staff tracking and monitoring the state changes to annual report requirements to ensure continued compliance.

Conclusion

State corporation, LLC, LP, and LLP laws generally require the filing of a report with the state’s filing office. To avoid penalties, compliance officers must ensure timely and complete filing of these reports.

Managing annual report requirements requires constant attention, especially if you have multiple entities across varying jurisdictions. Contact a CT Corporation representative to learn more about how to efficiently keep all your entities in good standing.

For more information on our annual report services, visit our annual report solutions.

Related resources:

Annual report due dates by state and entity type
Annual report solutions