Welcome to our weekly Business Basics post! In case you missed last week’s entry to the series, we are dedicating every Tuesday to helping explain the facets and aspects of starting and running a business that typically get overlooked.
Initial and annual reports (also known in some states as Statements of Information), while not particularly glamorous, keep your business in good standing. Plus if you misfile them, or file them late, your corporation or LLC could be slammed with fees, or even dissolution. Two things that you clearly want to avoid. But what are these reports, and what are they supposed to say?
This week, our ABC’s for business focus on the kind of standing your company is in, specifically keeping it in good standing. Good standing is defined as the status of a firm which is current with the payment of statutory dues and filing or required periodical reports. Keeping your company within good standing is absolutely necessary to your business and a big responsibility for any entrepreneur to take on.
Sometimes some proof of said standing is necessary, which is where a little thing called a certificate of good standing, or tax compliance, comes into play. This certificate is issued by a state official as evidence that your corporation or LLC exists and is authorized to transact business within the state as well as to make sure that you are running your business by the rules and regulations required by the law. Continue reading
Once a business is formed on the state level, most jurisdictions require corporations or Limited Liability Companies to designate a registered agent to receive documentation on behalf of the company. Very simply, a registered agent is an individual or entity upon whom documents relating to the corporation may be served.
To remain in compliance with state law, a Registered Agent must be designated to receive correspondence on behalf of the company. A Registered Agent will typically receive business and legal documents from county, state, and U.S. agencies on behalf of the corporation and/or LLC. These documents include such things as notice of litigation (service of process), franchise tax forms and annual report forms. Continue reading