What Is An Annual Report?
As a business owner, you have probably become familiar with more taxes and filings than you ever wanted to. It can be a lot to take in, and we are here to help. Let’s look at annual reports, fees, and requirements for your business.
What is an Annual Report
An annual report is a form that a business (usually corporation) is required to file to any state(s) they are registered in. Think of it like a statement of current information for the corporation. Some states may ask for more information than others but here is a list of basic information requested:
- Business name and address
- State of incorporation
- Registered agent information
- List of officers and directors or list of members of an LLC
- Details of business activities in the state
What states require annual reports
Ohio is the only state that does not require an annual report filing for any business type. The other forty-five states and Washington D.C. require corporations and/or LLCs to file and those states are as follows:
- New Hampshire
- New Jersey
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Dakota
- West Virginia
- Washington D.C.
Arizona, Missouri, and New Mexico all require corporations to file an annual report, but do not require LLCs to file. Conversely, corporations in Oklahoma are not required to file, while LLCs are. A South Carolina annual report is not required by the Secretary of State’s office. However, corporations are required to file a yearly state income tax return (SC1120 or SC1120s). These returns have an annual report included. LLCs that choose to be treated as a C or S Corp will also need to file either the SC1120 or SC1120S. And LLCs treated as partnerships or sole proprietors are not required to file an annual report.
Penalty for noncompliance
Penalties for non-filings can start with a fine and escalate to having your business removed from good standing with the state. Here are a few of the consequences for a business removed from a status of good standing:
- Vendors may decline to extend credit or refuse to do business with your company.
- Potential customers may pull out or require a certificate of good standing.
- Reinstatement to good standing can range from hefty fees to re-qualifying your business in the state.
Things to know
Please be aware that reporting requirements can vary in each state by frequency and entity type. Some states may require anywhere from a yearly filing to a decennial (every 10 years) filing. It is also important to recognize that your deadline to file may differ between a universal date that applies to all businesses or a date specific to your individual business (e.g., anniversary of formation). There are a few instances where the report is filed on even or odd years depending on entity type.
If required for your business, an accurate and timely filed annual report is one of the many steps needed to keep your company in compliance with state authorities, and save your business money. It is essential to know each states filing requirements and due dates to avoid filing headaches.
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Rick Bromund heads the tax research team at ComplYant, a technology platform offering business owners and entrepreneurs a simple way to manage tax rules and requirements. Rick is an experienced professional in the tax industry and has previously held positions at Fortune 500 companies as well as one of the big 4 accounting firms