Do I Need to Renew My LLC Every Year?

As the owner of an LLC, you’re responsible for keeping your business up to date and fully compliant with federal, state, and local regulations, including paying taxes and filing annual reports. 

Failure to comply could result in massive fines or even the revocation of your company’s registration. Read on to learn how to renew your LLC and ensure your business keeps chugging along without interruption. 

How to Renew Your LLC

Annual renewal fees and filing requirements vary from state to state. Arizona has no annual reporting requirement for LLCs, for instance, while New York requires LLCs to file biennial statements. So make sure you’re aware of your state’s requirements and deadlines. 

Renewal fees range from $50 to $750, and the filing process varies. Some states use a different name for regular reports. Your state might call it a periodic report, a biennial statement, or a franchise tax report. Regardless of the name, the purpose is essentially the same.

Remember that you’ll have to abide by your state’s guidelines whether or not your business made a profit. Failure to comply could result in hefty fines or the dissolution of your business. Fortunately, in most states, annual filings can be completed online. 

It’s important to pay close attention to filing due dates, too. In some states, annual reports are due on the anniversary of your business formation. In others, all businesses have the same yearly due dates. 

Multi-State Businesses

LLCs in multiple states must register as foreign LLCs and comply with each state’s annual filing requirements. A foreign LLC is an LLC doing business in a state other than the one in which it initially registered. 

For example, if your LLC is registered in Pennsylvania and you start doing business in New Jersey, you must register as a foreign LLC in New Jersey.

If you fit any of the following criteria, your LLC may be considered a foreign business:

• You have a physical presence of any kind in that state
• You have employees in that state
• You regularly meet with clients, managers, or investors in that state
• You are licensed to do business in that state

You may also need to register as a foreign LLC if your business has a bank account or property in that state. However, if you’re an online business registered in one state that makes sales in other states, you’re most likely not a foreign business. 

Summary

Following your state’s annual renewal requirements ensures your LLC stays in compliance and avoids serious fines and worse. 

Familiarize yourself with your state’s guidelines and set reminders of key deadlines so you don’t get into trouble. If you’re unsure about your state’s annual reporting and renewal system, you might want to consult with a business attorney.