Introduction
Starting a new business is not easy. Being an owner of a Limited Liability Company (LLC) requires that you take care of many administrative tasks, such as filing LLC articles and preparing your operating agreement and other documents.
However, in most cases, you will also need to file annual reports with the state where your LLC is registered.
What is LLC annual report?
An annual report for an LLC is a record that every LLC must file in most states. Every year, an LLC or LLLC must fill out this form and submit it to the state where they are registered to do business.
The annual report covers two main topics:
- The financial performance of your company.
- Any changes in management structure or officers.
The purpose of an annual report for LLC
An LLC annual report is a document company, and other businesses must file to the IRS. It’s part of the annual reporting requirements that the IRS has for companies with less than $10 million in assets and income.
The purpose of an annual report is to let the federal government know that you are still alive and kicking so they don’t think you’ve gone out of business.
If you don’t file an LLC annual report and pay LLC annual fee, there are no penalties; however, if the IRS notices that your company hasn’t filed for three years, they may classify your company as inactive due to lack of activity.
Annual LLC report requirements
A report called an LLC annual report provides information about the company’s operations for the past year. Depending on where you form your LLC, it may be filed with your state’s Secretary of State and your county clerk.
The purpose of an annual report is to help ensure that all businesses operating in the U.S. are properly maintaining their legal documents and financial records.
By filing an annual report with your state’s Secretary of State or county clerk, you demonstrate that you have followed all regulations set by these government agencies and are doing everything legally required of you.
LLC Annual Report Filing Fees and Due Date
The average LLC filing fee is $125. However, your state may charge a higher or lower price depending on the size of your business and other factors.
If you’re unsure how much to expect, check with your state’s Secretary of State website before filing.
These days are usually in March or April each year but can vary depending on where you live; you must check with your secretary of state office if yours isn’t listed here.
What Happens If You Fail to File an LLC Annual Report?
- Late fees and fines. If you fail to file your annual report, you will be charged a late filing fee of $100 per month.
- Penalties. For more information about penalties and interest on tax bills, see the California Franchise Tax Board’s publication “Tax Tip 2018-50: Interest Rates and Penalty Amounts.”
- Taxes from prior years may apply even after dissolution is complete because all LLCs must still file annual reports until they dissolve their business entities entirely.
How to File an LLC Annual Report
- File LLC Annual Report Online: The Secretary of State’s office makes it easy to file your annual report online. This service is also available if you need to change the information in your business’s records.
- Print and Mail LLC Annual Report: If you choose not to file online, print out the completed LLC Annual Report form and mail it in an envelope with proper postage affixed for overnight delivery, certified mail, or registered mail.
- How to File LLC Annual Report by Mail: Send your completed form as described above by regular first-class mail or certified letter.
- How to File LLC Annual Report by Fax: Faxing is another option than waiting for them at home while they are being mailed back and forth between parties involved in a transaction.
LLC Annual Report State Requirements
Every state has different requirements for LLC annual reports, but there are some similarities across states.
In addition, some states may require that you file an LLC annual report even if you are not required to register with them otherwise.
Most states also have a fee associated with filing an annual report. However, some states waive this fee if your business is inactive or in good standing with their office.]
Conclusion
As may be seen, in terms of filing an LLC’s annual report, there are a lot of details to consider.
That’s why it’s imperative to do this correctly first and ensure you don’t miss any deadlines or pay unnecessary fees.