When you formed your company with the state — whether you opted for a corporation or an LLC — you filed initial formation documents that provided the state with basic information about your company and you appointed a Registered Agent. Those two steps are required to form your corporation or LLC.
However, they were not the end of your obligations to the state. As long as you continue to operate as an LLC or corporation, you must maintain a registered agent. And most states require that you file an annual report that supplies current information regarding your company.
CT Corporation tip: If you expand your business into another state and register to do business there, you will need to maintain a registered agent in that state and, in most states, file an annual report there too.
What is the function of a registered agent?
The main function of a Registered Agent is to receive service of process, which is the legal paperwork that gives your company official notice of a lawsuit filed against it. Other important legal documents the registered agent may receive include wage garnishment notices and subpoenas.
In addition, the states send important compliance information and official correspondence to the registered agent, who then forwards those documents to the appropriate contact person in your business. These mission-critical documents can include annual report notifications and forms, as well as tax forms and other important notices.
Given the importance of the documents that the registered agent handles, it is essential that the registered agent you choose for your LLC or corporation be competent and experienced. With most of these documents, time is of the essence and a professional registered agent is best equipped to handle the task effectively.
CT Corporation tip: A registered agent must be an individual resident of the state or a domestic or qualified corporation or LLC. For this reason, once a business expands beyond a single state, the owners of the corporation or LLC often elect to have one professional registered agent handle all registered agent responsibilities.
What is the state annual report requirement?
Nearly every state requires a periodic report that updates an LLC’s or corporation’s basic information, such as the principal office location, name and business address of the people managing the business (e.g., directors, officers, managers, members) and the name and address of the registered agent. Most states have an annual requirement, although a few have a biennial requirement.
In some states, the franchise tax requirement is tied to the annual report filing requirement. In Delaware for example, the annual franchise tax report is used to calculate the franchise tax and update the basic information for the state’s domestic corporations.
States also vary widely regarding the due dates for the annual reports. In some there is a fixed calendar date. Other states tie the annual report due date to the anniversary of the company’s formation or foreign registration.