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?
Initial reports are exactly what they sound like – reports filed at the beginning of the formation of a Corporation or LLC, or shortly thereafter. Different states have different requirements, but the basic information is typically the same. The initial report usually needs to name a registered agent and give that agent’s primary address, along with the business’s address. It will usually also need to list the names, and in some cases addresses, of any officer’s, directors, and/or members of the new entity. Finally, it needs to disclose what the business actually does. As of this posting, only ten states require new Corporations and LLCs to file an initial report: Alabama, Alaska, California, Connecticut, Georgia, Missouri, Nevada, New Mexico, Oklahoma, and Washington.
Filing requirements for annual reports vary from state to state. Ohio, for example, does not require any business entity to file an annual report, and LLCs are excused from filing in Delaware. Annual report can sometimes be a bit of a misnomer as well, as some states, like New York and Indiana, only want biennial reports. Each state has its own requirements and deadlines, which makes summarizing annual report requirements a bit difficult, so when you do file, make sure you check with your state’s Secretary of State or Division of Corporations so you know, exactly, what is expected. Typically, annual reports are just used to keep the information that the state has on your company current, and so the state will likely ask for the same things that initial reports do – names and addresses for your registered agent and the members/directors/executives of the LLC or Corporation, along with your primary place of business and a description of what your company does. But, again, every state is different, so be sure to check your state’s website – MyCorp is also happy to help you if you need us too!
Obviously, initial and annual reports, or statements of information, are not particularly difficult to fill out. The confusion stems from the fact that each state has its own requirements. Luckily most states have a standardized form that they like businesses to use, which makes the process much easier. Just be sure to know when you need to file by in order to avoid late fees and, before sending it in, double check the form to make sure all of the information is correct.