What this is: Answers to some frequently asked questions about how annual/periodic reports are handled across the country.
What this means: Because each state has different requirements, companies that operate in multiple states may find it challenging to understand and keep track of what they need to do.
Compliance is a prevalent concern for all businesses due to the ever-increasing number of regulations that must be met. One aspect of “compliance” for business entities involves filing informational reports in states where the company is doing business. Most states require registered entities to file a yearly/periodic informational report in order to maintain good standing and remain compliant with the state.
It seems simple enough, however, since each state has different requirements, companies that operate in all or many states can find it challenging to understand and keep track of what they have to do. Hopefully, the answers to the frequently asked questions below will help to clarify some of the variations and exceptions in how annual/periodic reports are handled across the country.
No, there is a lot of variation in how each state refers to this required filing. For example, in Connecticut, Idaho and many other states, this report is referred to as an “Annual Report,” while in California it is called a “Statement of Information.” Below is a list of some of the commonly used names across the nation:
The different names for the informational reports in each state are confusing enough, but add to it the fact that there are companies who purposefully confuse you further. These companies mail notices that look official and offer to provide, for a fee, services that either are not required in the state where the entity is registered or that you can easily handle yourself at no cost. (More information on how to recognize these kinds of solicitations.)
An informational report is generally, but not always, required for every entity type in most jurisdictions. Some states may require reporting for corporations, but not limited liability companies or other entity types and vice versa. For example:
It is important to thoroughly review each state’s statutory requirement based on the type of entity and whether it was domestically formed or foreign qualified in the specific state.
While each state’s annual/periodic information report may be different, there is basic information that is required in most states. Common questions that are asked on the majority of information reports for the different states include:
*Some states do require the listing of multiple, and sometimes very specific, officer titles on the annual information reports. Below are a few examples, but this does not include every possible scenario:
Individual state statues govern and regulate the varying due dates for these informational reports within each state. These due dates vary widely from state to state and can also be based on the type of entity. States calculate these due dates differently. Some commonly use the anniversary date of the entity’s formation or qualification or the last day of the entity’s anniversary month. Some states, such as Minnesota, have all Annual Renewal Reports due on the same day (December 31) each year for all entity types (corporations, limited liability companies, etc.). Some states use other criteria, such as the entity’s fiscal year end.
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Some states require the listing of specific financial data in conjunction with the informational report filing. This additional information is commonly required for for-profit corporations and varies from state to state.
No, approximately 25% of states require the listing of some financial information when filing a corporation’s annual report. These include:
An entity’s stock structure is commonly required on an annual report. General stock information requested may include:
State requirements for the date range of financial data vary but usually fit one of the following criteria:
The answer to this question varies greatly based on the state in which you are filing. Usually, if you are required to pay a franchise or corporation tax along with the annual report, then the fee changes based on the financial information disclosed. As a sample, the following states require a fee based on the financial data provided:
Yes. Each state customarily allows an amendment filing to change the financial information that is on record with the respective Secretary of State. These amendment forms can be found on each state’s website.
For example, Illinois requires the financial information on the current report to match what is on record with the Secretary of State. If they are not a match, an amendment (BCA 14.30 form) must be included with the annual report submission to avoid rejection. If you are unsure of what financial information was listed on the last filed annual report, you can order a copy of the last report from the Secretary of State for an additional fee.
The annual report forms can usually be found online on the Secretary of State websites. There are some states that require electronic filing of the annual reports via the state's website. Most times, these states will require payment by credit card, state account or ACH transfer.
No, there are a few states in which the tax return is filed in conjunction with its annual information report. Below is the list of the states that this applies to:
Compliance is an ever-growing and continually changing concern for all companies, from the large conglomerate to the small family-owned corporation. If your company handles all of its annual/periodic report filings, it is important to fully understand the requirements in each state where you are registered to ensure ongoing good standing and compliance. Seeking the assistance of a competent attorney, tax consultant or service company can make the process a lot easier and help to ensure your reports are being handled properly.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.