If you’re starting a new business, you probably know how complicated it can be to keep up with the latest filing and compliance regulations. Annual reports are one of the most common types of documents filed by LLCs and other businesses, but the rules about annual reports can be surprisingly unclear.
We put this article together to help business owners understand what annual reports are and when you’re required to file them. Firstbase Agent automatically tracks annual report deadlines and other ongoing compliance requirements — click here to sign up and let us take the headache out of your annual reports.
Annual reports provide a snapshot of your business operations as well as any changes that occurred in the previous year. The specific requirements vary from state to state, but most annual reports contain similar information.
Annual reports are a key compliance requirement for companies that do business in the United States. While they don’t take very long to fill out, deadlines can be hard to follow and businesses can face serious consequences if they fail to meet their obligations.
Keep in mind that this kind of annual report is different from annual reports provided to shareholders by publicly traded companies.
Most US states require one annual report per year. A handful of states only ask for reports every other year, while some don’t require an annual report at all. Pennsylvania is a little different, with reports required just once every ten years.
One challenge of annual reports is that each state has its own filing deadlines. To make things even more confusing, some states have the same deadline for every business, while other states adjust requirements based on when each business was founded.
For example, Alaska requires biennial reports by January 2nd, while Michigan requires them no later than February 15th. A total of 20 states have deadlines that vary depending on the company’s anniversary. This table of annual report deadlines is a helpful resource for any business owner.
If your business operates in ten states, there’s a good chance that you’ll need to meet ten different filing deadlines. This adds a substantial degree of complexity, particularly for smaller businesses.
Firstbase Agent makes things simple by generating automated email reminders and dashboard notifications as each deadline approaches. With Agent, you’ll never have to worry about navigating this complicated legal landscape.
On top of different filing deadlines, each state also has its own requirements for annual reports. You will need to check those requirements for each state in which your business operates. For example, the Washington state annual report form calls for:
Failing to file annual reports by state deadlines can lead to serious consequences. The most obvious penalty is the late filing fee. For example, Washington state-based LLCs will pay an extra $25 if they miss the deadline. That might not sound like much, but it can add up quickly if you start missing deadlines in multiple states.
More seriously, you could lose your license to operate in that state if you miss the annual report deadline. If you realize you missed a deadline, make sure to file and pay the late fee as soon as possible to avoid falling out of good standing with the state government.
Losing your business license could also open you up to additional liability. If you have an LLC, for example, you rely on that business structure to safeguard your personal assets. However, you may lose that protection if you are targeted by lawsuits or creditors in a state where your business is no longer in good standing.
You can view forms and file annual reports in most states through the website of the corresponding Secretary of State. Make sure to avoid doing this at the last minute so that you have time to gather any information you might be missing. Firstbase Agent makes this process easier by filing annual reports for you based on information about your business.
However, while some states accept online filings, others may require you to mail a physical form to the office of the Secretary of State. Keep in mind that you will also have to pay a filing fee in order to stay in good standing with the state office.
Annual reports might seem like a simple task, but the truth is that they’re easy for new business owners to miss. As your company grows, it’s important to develop processes for keeping track of annual report deadlines and making sure you file in time in every state where your business operates.
Firstbase Agent was designed from the ground up to make annual reports and other requirements easier for business owners to manage. Click here to learn more about how Firstbase Agent can streamline compliance for your small business.