An LLC is like a car. You can pay the initial cost for it, but that doesn’t mean it will run forever. To keep it in good condition, you can’t skip out on its routine maintenance. For cars, this means oil changes, tire rotations, etc. But for LLCs, ongoing maintenance means annual reports.
Analogies aside, most states need to keep accurate and updated records on all the businesses operating within them, which is why many impose ongoing compliance requirements for their LLCs in the form of annual reports.
Unsure about your state’s reporting requirements? You’re not alone. Many business owners aren’t aware of annual reporting requirements or other LLC maintenance processes until it’s too late. Fortunately, this guide covers all 50 states, so if your state has mandated maintenance, you’ll know about it. By the end, you’ll be ready to maintain a successful LLC for years to come.
What Is an Annual Report?
Have you ever taken a census, where you provide your personal information to the government? Annual reports are like that, but for businesses. It’s a way for the state to stay up to date on your company’s important basic information. If throughout the year, you changed your LLC’s name, address, registered agent, or any other details, you’ll inform the state using this report.
Some states require reporting every year, some require it every other year, and some don’t require it at all! Regardless of the report frequency, you will have to pay a fee to file your report in the vast majority of states. This fee can be as low as $10 or as high as several hundred – it all depends on your state. Check out your state’s annual report price tag ahead of time to avoid sticker shock when filing time comes.
This is important because the state needs an accurate way to contact you if necessary. Out-of-date contact or registered agent information on file means they might not be able to carry out service of process if your business is sued. In that situation, it’s possible that a lawsuit could go through the court system without you ever appearing to defend yourself!
What Happens If I Don’t File an Annual Report?
Instead of filling out forms and paying potentially-substantial fees every year, you might be tempted to fly under the radar. After all, out of all the business in the state, the government won’t notice if one doesn’t file, right? Wrong. Avoid this temptation because most states have harsh penalties for failing to file your reports.
Fail to file a report on time and you can expect to lose your company’s good standing with the state and potentially incur late fees. Some states will go as far as dissolving your limited liability company if you don’t file your annual report by a certain date. This means your business will no longer be a legal entity and you will lose your personal asset protection.
If your LLC gets dissolved, don’t panic. Your company can apply for reinstatement, but an administrative dissolution can still lead to voided contracts, strained business relationships, and a pierced corporate veil. The good news is that you can avoid all this by filing your reports on time.
Which States Do Not Require Annual Reports?
There are eight states that do not require limited liability companies to file annual reports. If your LLC resides in Arizona, Arkansas, Delaware, Missouri, New Mexico, Ohio, South Carolina, or Texas, lucky you! You won’t need to file any reports.
As we mentioned earlier, other state states require reports, just not on an annual basis. If you’re operating a business in Alaska, California, Indiana, Iowa, Nebraska, or New York, you’re only required to file a biennial report every other year. In Pennsylvania, you’ll only need to file a report once per decade.
Which States Require Annual Reports?
There’s no one-size-fits-all annual reporting process because each state has slightly different rules and regulations. You should check with your Secretary of State to find out what it looks like in your state, but for your convenience, we’ve provided the basic information for each state below.
Can I Hire Someone to File My Annual Reports?
Most annual report processes are less intimidating than they seem on the surface. Still, it’s just one more thing to remember on top of everything else, so busy entrepreneurs will often enlist outside help from an online business service provider. These companies offer various packages – some are full-service and do everything from filing reports to tracking due dates, and others simply fill out the annual report form at your request.
It won’t break the bank either, as annual report service is usually reasonably priced. Even though it’s not much of a hassle to do it yourself, it’s a pretty minor expense if you’d rather hire someone. If this sounds like it would benefit your business, check out our company recommendations:
- LegalZoom – $55: You won’t find a better combination of customer service and affordability than LegalZoom. Their combination of elite brand power and very high customer volume makes for excellent service at a great price. Throw in their extended customer support hours, and you’ve got a worthy contender to take care of your annual report.
- MyCorporation – $98: While their prices are certainly higher, there’s good reason for it. MyCorporation offers a fully managed annual report service. This means you don’t even have to keep track of your own due dates, as they’ll take care of the entire process for you. Choose them and you won’t have to think about your annual reports again.
- Harbor Compliance – Price Varies: Harbor Compliance takes the same approach as MyCorporation with fully managed service, but they add their next-level compliance calendar, as well as one-on-one personalized customer support.
If you’re one of the more fortunate entrepreneurs among us, you might reside in a state that doesn’t require annual reports. But for everyone else, be sure to read up on your particular state’s requirements. Filing an annual report might seem like a formality on the surface, but in reality, it’s a crucial part of the ongoing LLC maintenance process, and it helps the state stay up-to-date regarding some important details of your business.
Taking on the reports yourself is a totally viable route. Plenty of successful business owners do it. But there’s no shame in outsourcing those responsibilities either, letting an online business service handle it for you. Whichever you choose, stay on top of this maintenance and you’ll have a healthy, thriving LLC.