Operating as a corporation or LLC gives your business legitimacy. It shields the owners from liability and may provide tax advantages.
However, an LLC or corporation faces ongoing state-reporting obligations.
One requirement for corporations and LLCs is to file an annual report in the formation state and every state where it is registered to do business. This requirement usually commences on the year after formation or foreign qualification and continues until Articles of Dissolution in the formation state or Articles of Withdrawal in the foreign state are filed.
These are general rules. Some states require a report only every other year. A few do not have any information reporting requirements. And, some require an initial report within a short time of incorporation or foreign qualification.
Knowing that you have to file is one thing. Keeping track of when you need to file can be something else entirely. This is because in roughly half the states, the filing deadline is based on the date of incorporation, formation, or foreign qualification. These states use the “anniversary date” as a starting point; your annual report is due within a period of time-based off of that anniversary date.
However, the time period for filing (or e-filing) the annual report varies widely from state to state. When multiple states are involved, it gets confusing in a hurry.
For example, Rose’s Buds is a florist that incorporated in State X. Rose’s business has grown steadily, and the company filed for foreign qualification in State Y and State Z.
Question: What annual report deadlines must Rose's Buds track?
Answer: In all three states: State X, State Y and State Z.
Now is a good time to review your compliance obligations. If you do not expect to expand outside your home state—and you have the time and the desire to keep on top of the filing deadlines—you might be able to handle the task on your own.
But if you find yourself juggling numerous roles and responsibilities while driving your business forward, it may be wise to retain compliance professionals to help avoid annual report or other compliance headaches.
