Whether you just formed a new company or whether your company has been around for years, you may need to file an information report or annual report soon. Overlooking this routine filing can have serious consequences. If your company is required to file, you can easily avoid these consequences by knowing the states that require the filings, tracking the filing deadlines, and filing the reports before your company is dissolved for failing to do so.
Check out the following annual report FAQs and keep your business on track. If you don’t have time to handle the annual report filings or if you prefer to focus on other priorities in your business, hire a professional to track the due dates for your company’s annual report and to handle the filing for you.
Why does it matter?
Probably one of the main reasons you formed your entity (whether a corporation, limited liability company, or something else) was for liability protection. That protection can depend on whether your legal entity is in “good standing.” If it isn’t in good standing, and if something bad happens at the entity level, such as being unable to pay its debts or getting sued, the individual owners of the company may be personally responsible.
What is an annual report?
An annual report contains official information about a company that is formed or doing business in a specific state. The report helps the state maintain current information about the company’s ownership, management, and location so that other government agencies and the public can locate and communicate with the company more easily. Keep in mind that a few states may call the report something other than an annual report, but the report is similar. For example, the Missouri Secretary of State calls it a Registration Report.
What information is included in an annual report?
The information contained in an annual report varies by state and entity type. The report isn’t complicated and it doesn’t require a lot of information. In many cases, the annual report includes only the following details for a company:
- name of the company and its principal office address
- information about the corporate shareholders, officers, and directors or the LLC members and managers
- registered agent name and address
Does your company need to file an annual report?
Almost all business entities need to file an annual report or a similar report that might be called something different, but there are exceptions. For example, if your LLC is formed or qualified to do business in Kansas, it must file an annual report with the Kansas Secretary of State. However, if your LLC is formed in Missouri or qualified to do business in Missouri, it isn’t required to file a report with that state. A company may need to file more than one annual report if it is doing business in multiple states.
When are annual reports due?
The report is commonly known as an annual report because in most states the report is due annually. In other states, the report might be due every other year or at different intervals.
The due date differs by state. Some states require that the report be filed by a specific date regardless of when the entity was formed or qualified to do business in the state. Other states impose a due date based on the anniversary date of the company’s formation or qualification to do business. And in states like Kansas, annual report due dates are based on the entity’s fiscal year-end date.
Due dates may vary based on entity type, also. For example, in Missouri, a not-for-profit corporation must file its report by August 31, while the due date of a for-profit corporation’s report is based on the company’s formation date or date of foreign qualification.
What fees are due with annual reports that are filed on time?
The fees differ by state and often by entity type. The fee might be set or it might depend on the number of authorized shares of a corporation, the number of LLC members, or the number of partners in a partnership. In some states like Delaware, the state assesses an annual report fee and a franchise or similar tax. The fees may also depend on whether the company files the report by mail or electronically through the state’s website.
Where and how are annual reports filed?
Some states will send a reminder or annual report form in the mail to the company’s registered agent. The form might be pre-filled with the information currently on record or it might be blank. Some states may require that an entity file the report by mail, while other states may allow or require electronic filings. Even if the company doesn’t receive a reminder or pre-printed form in the mail, it must file the annual report on time. This means it is critical to independently track due dates. You can follow these links to file your company’s Kansas annual report and Missouri registration report now and check this item off the to-do list.
Who signs the annual report?
An authorized representative of the company should sign the annual report. Most often, this means an officer or director of a corporation, a manager or authorized member of an LLC, or a partner of a partnership.
Does the state send reminders of annual report filing dates?
Some, but not all, state agencies send a courtesy reminder of the annual report due date to the company’s registered agent or principal place of business. Companies often overlook these reminder notices, though. Unless there’s a transaction in process or other event requiring that the company be in good standing, it could be years before a company realizes it has lost its good standing status for failing to file its annual report. It’s best not to rely on a reminder from the state. Instead, calendar a reminder of your own or hire a professional to track the due date and file the annual report for you.
What happens if you don’t file your annual report on time?
Filing an annual report on time is critical to a company maintaining its good standing. States can impose late fees and penalties on a company that fails to file its annual report timely. And, after a short period of delinquency, the company may lose its good standing and be administratively dissolved by the state. A company may be able to fix a delinquent annual report filing, but it must be aware of the delinquency in the first place and then act promptly to avoid administrative dissolution.
How do you attain good standing status after administrative dissolution?
If the state administratively dissolves a company’s charter for failing to timely file an annual report, it is possible to attain good standing status again through a process called reinstatement. Generally speaking, this process requires that the company file a reinstatement application with the state, catch up on all delinquent annual report filings, and pay sometimes hefty reinstatement fees and late annual report filing penalties. In some cases, the company must also provide a written certification from the state taxing authority that the company has paid all taxes due. The reinstatement process can take weeks to complete, especially when the delinquent company must obtain a “no tax due” certification from the state. Also, it is important to keep in mind that some state agencies might be working with reduced staff or staff who are working remotely due to the COVID-19 pandemic, and this may cause further delays in processing these applications.
Should my company hire a professional to manage its annual report filings?
If you or your employees don’t have time to handle annual report filings or if you prefer to focus on other priorities in your business, consider outsourcing the responsibility for monitoring and filing your company’s annual reports to a professional. Professionals can manage these filings efficiently for a reasonable fee and calendar reminders for reports due in future years.
Losing good standing status could have major consequences, especially if the company is in the process of closing a merger, acquisition, or sale transaction, applying for a loan, raising capital from investors, bidding on a project, or bringing a lawsuit, so it is prudent to file these reports on time and not put your company at risk.