As the owner of an LLC, one major responsibility you have is filing an annual report. Annual reports are necessary for most states to keep your business up to date and in compliance. However, filing them each year also commonly includes a fee, which must be paid along with your submission.
Whether you’re tackling your very first annual report or just need to brush up on the basics, this guide contains all you need to know about annual reports and how to file.
What Is an Annual Report?
Annual reports provide basic information about your LLC, including the names and addresses of members, managers, and your registered agent. They also offer a comprehensive report of all business activities throughout the year and capture financial performance.
States require annual reports to be publicly available and updated with the latest information. Some states also use annual reports to determine the amount of taxes owed.
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 taxes and annual reports. Failure to comply could result in massive fines or even the revocation of your company’s registration.
How to Renew Your LLC Annual Report
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 different names for regular reports. Your state might call it a periodic report, a biennial statement, or a franchise tax report. Regardless, the purpose is 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. In some states, annual reports are due on the anniversary of your business formation. In others, all businesses have exact due yearly dates.
LLCs that do business in multiple states must register as foreign LLCs in some states and comply with each state’s 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.
Filing annual reports takes considerable time and effort, but they are necessary for running your business. Take the time to familiarize yourself with your state’s rules and regulations on filing. Make sure to file your LLC annual report on time and pay any associated fees to keep your business in good standing.