Significance of Filing an Annual Report
What is an Annual Report?
Most entities are subject to regular reporting requirements to the federal government, state jurisdiction, and/or local jurisdictions in which business is transacted. The definition of an annual report is a required filing due to the Secretary of State, usually a listing of directors, officers and some financial information.
States in which your corporation or LLC is formed or qualified to do business in generally require you to file an annual report.
By filing an annual report, you're providing the Secretary of State with updated information about your business. The details of your annual report may vary from state to state, but typically include information about your corporation or LLC such as:
- the names and addresses of your officers, directors, members, managers and/or trustees
- your principal business office address
- the name of your company's registered agent
- the number of shares of stock your corporation has issued
Different states charge different filing fees for annual reports. Deadlines, too, vary from state to state. Some states have only a bi-annual (every two years) filing requirement. Other states require corporations and LLCs to file an initial annual report soon after formation.
What is the purpose of filing an Annual Report?
The purpose of filing an annual or biennial report is to provide the jurisdiction with current information on the company's structure (officers, directors, members, registered agent, etc.) and finances (authorized shares, issued shares, stated capital, paid in capital, etc.) In many states the amount of a company's franchise tax due is often determined by the information provided by the company on its annual report.
What happens if I ignore or miss my Annual Report due date?
Missing an Annual Report due date can have major consequences. A company's good standing status and even its rights to exist can be jeopardized by ignoring annual report requirements. A company may also incur monetary penalties for not filing their report on time. If you are late to file your annual report, depending on the state, you'll have to pay penalty fees and reinstatement fees, both of which are much higher than the price of actually filing the annual report for the first time.
We at AO Tax can prepare and file your business's annual reports. By outsourcing the job to us, you'll save time, remove uncertainty about details, deadlines and fees, and help protect your company's good standing. To make sure we have the right information, we'll even conduct a thorough audit of your company records and provide you a detailed report of our findings. It's important to note that along with annual reports, many states require companies to pay annual franchise taxes. We at AO Tax can help you satisfy your franchise tax filing requirements, as well as a host of other business compliance obligations.
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