You did it. Your California LLC is officially up and running, ready to take on challenges, roll in the profits, and change the world.
There’s no doubt that this is an exciting time in your business journey. After starting your LLC, it’s easy to get carried away in all the excitement and expectations. After all, as a new business owner, you’ve got a lot on your plate.
But the state does too. They need to keep updated records on thousands of businesses so that they can effectively reach out with any important tax or legal communications down the road. How do they do it? With your cooperation, of course.
In California, an LLC’s annual report consists of two parts: a Franchise Tax and a Public Information Report. Each LLC must submit these filings to the California Comptroller every year to keep their information current. Unsure how to go about it? Never even heard of it? No worries at all. That’s why we’re here. Keep reading for everything you need to know.
For brevity’s sake, we’ll refer to these two combined filings as the “Annual Report” in this guide.
What is a California Statement of Information? Why is it Important?
Consider a Statement of Information the state’s yearly checkup on your LLC. It’s similar to a census in that its purpose is to collect the necessary contact and structural information about each California business.
Each state has its own annual reporting requirements, and some don’t even require them. But in most states, you’re required to submit one per year that includes your LLC name, principal office address, agent for service of process information, and member/manager names and addresses. Whether you run a domestic or foreign LLC, you should plan on submitting a Statement of Information.
Don’t be intimidated, but it’s not something you want to take lightly. This is how the state updates your LLC’s record with the most recent information. They need to know how to reach you with important information about your business status, upcoming filings, taxes, and service of process.
For example, if you change your agent for service of process, or your current agent resigns, you’ll need to keep the state informed so they can update their contact information. Miss one of their communications and your LLC in California might end up falling out of good standing or, even worse, administratively dissolved.
Moreover, keeping your information current will help other businesses and potential customers find you. Keeping the most updated information on record is essential for helping new customers and other businesses find your LLC. If the Secretary of State has your most recent info on file, a simple name search will help people find you.
How Much Does the California LLC Statement of Information Fee Cost?
If you’re putting together a budget for all your LLC’s costs – like formation costs, name reservation fees, and initial operating expenses – it’s important to include annual filings like this one, just so that there are no surprises.
Costs vary from state to state. Some are free while others can be several hundred dollars. California’s Statement of Information, however, falls at the lower end of that spectrum, just $20 for each filing.
Due Date and Frequency for an Annual Report in California
More good news: California LLCs only need to file a Statement of Information every other year rather than annually (like corporations do). If you formed your LLC during an even-numbered year, you’ll file on every subsequent even-numbered year. And if you started it during an odd-numbered year, you’ll file during every odd-numbered year. In the appropriate years, your Statement of Information will be due by the end of your LLC’s anniversary month (the month when it was formed).
Let’s say you formed your LLC in March of 2012. In this case, you would need to file a Statement of Information by March 31 in 2014, 2016, 2018, and so on.
What Happens if You Don’t File?
You might be thinking, “that sounds like a pain. How bad could it be if I just fly under the radar?” The short answer: don’t try it. Failing to file your Statement of Information can yield some serious consequences. Fail to file your Statement of Information on time and you could be looking at a $250 penalty and the loss of your LLC’s good standing with the state.
We’ve laid out all of the information, and now it’s time to take action by filing your Statement of Information. Whether you choose to file online or using a paper form, you’ll need to include:
- LLC name
- 12-digit Secretary of State File Number
- State, foreign county, or place of organization (foreign LLCs only)
- Street and mailing addresses
- Name and address for each member/manager (use Form LLC-12A if necessary)
- Agent for service of process name and address
- Type of business
- Name and address of CEO
The form itself contains additional information on each item and step-by-step instructions for completing and submitting it.
All that’s left is to submit your completed form, and you have three ways to go about it: online, by mail, or in person. Online is the quickest route, but if you just love the feel of a paper form, or you like doing business face to face, the others are just as effective.
Online: Head to the bizfile California online filing page and click “LLC Statement of Information.” Follow the onscreen instructions and you’ll be done before you know it. You can pay with a credit or debit card (Visa or MasterCard) as part of the filing module and your form will be processed within one business day.
By Mail: Download and complete Form LLC-12. Then, include a $20 check made out to “California Secretary of State,” and send your materials to:
Secretary of State
Statement of Information Unit
P.O. Box 944230
Sacramento, CA 94244-2300
In-Person: If you live near Sacramento and would rather hand-deliver it, you can drop it off at 1500 11th Street, Sacramento, CA 95814.
Does the State Send Reminders?
Reminders are always nice. They help you stay on top of your business requirements and ensure that you won’t fall out of good standing.
Unfortunately, you won’t be getting any help from the state in this endeavor. The California Secretary of State doesn’t typically send out reminders about Statement of Information due dates or other ongoing filings. So, it’s up to you. Mark it on your calendar, write it in your planner, set an alert on your phone, anything that will remind you to file before you’re hit with a hefty late fee.
Can I Hire a Service to Handle it?
You probably have a full plate as it is, and the thought of adding one more responsibility to your to-do list might make you shudder. You’re not alone.
Plenty of other LLC owners have outsourced their reporting duties to LLC services. These companies will take the entire process off your hands, handling your Annual Report each year. If that piques your interest, we recommend ZenBusiness, which is an experienced and trustworthy LLC company.
But their services aren’t restricted to forming an LLC or managing Statements of Information. They can also help you form your business, draft an operating agreement, handle agent for service of process responsibilities, and much more, all for a reasonably low price.
If thinking about your LLC responsibilities ties your stomach in knots, let ZenBusiness take some of those worries off your plate.
There you have it, everything you need to know about California’s reporting requirements. Follow this guide to a T and your LLC will be prepared to operate smoothly and in good standing long into the future.
And remember, if at any point it seems overwhelming, you’re not alone. A good LLC service like ZenBusiness (or LegalZoom) can be a valuable resource, taking care of all the little details, so you can focus on growing your business.