Running a business can sometimes be exhilarating work, but it can also come with its fair share of tedium—thanks to the long list of tasks associated with compliance. Filing an annual report in your state of incorporation—and any additional states where you’re registered to do business—is one of those tasks. And like many business compliance tasks, the specific requirements to file vary from state to state.
What is an annual report?
An annual report is a brief overview of key facts about your company filed to the Secretary of State in any state where you are registered to do business. Typically, annual reports include business contact information and a record of the company’s activities (such as a merger or a dissolution) during a given reporting period.
States use annual reports to keep information about your company up-to-date and make sure that they are able to deliver routine government correspondence or contact you in the event of a legal action. In some cases, the Secretary of State also uses annual report information to assess your franchise tax obligations in a particular state.
An annual report can also be known as an annual statement, a statement of information, a periodic report, a biennial statement, or a decennial statement. Filing processes, fees, and frequency all vary by state—biennial statements are due every two years, as an example, and decennial statements are due every ten.
Annual report vs. annual shareholder report
Although both are sometimes referred to as annual reports, the annual information reports required of most business entities are distinct from the comprehensive annual shareholder reporting required of public companies. Annual shareholder reports are federally mandated disclosures designed to help stakeholders and potential investors evaluate a company’s performance and financial conditions and make informed investment decisions. They include quantitative and qualitative performance analysis, financial statements (including cash flow statements, income statements, and balance sheets), an auditor’s report, an overview of accounting policies, and details about the company’s operations.
Who’s required to file an annual report? Who isn’t?
Most states require limited liability companies (LLCs), corporations, limited partnerships, and limited liability partnerships (LLPs) to file annual reports. In most cases, these business entities are required to submit an annual report in every state in which they are registered to do business.
Sole proprietorships and partnerships typically aren’t required to file annual reports, although jurisdictions may require annual renewals for certain types of business licenses.
What’s covered in an annual report?
Although specifics vary by state and business entity, annual reports typically include the following information about the company:
- Business name
- Primary office address
- A brief statement of business purpose
- Your EIN and any other state-issued registration numbers
- Registered agent information (if applicable)
- Addresses of offices in the state (if applicable)
- Fictitious name (if applicable)
- Number of authorized shares (for corporations that issue shares)
- The names and addresses of directors and officers (for a corporation), members and managers (for an LLC), and partners (for a partnership)
Some states will also request financial information, such as liabilities and assets located in the state.
Most states charge an annual reporting fee, which can range from $9 to over $1000 depending on the state, business entity type, and specifics about the company’s operations. Corporation or LLC fees, as an example, may be assessed based on the number of authorized shares or the number of LLC members.
When do you need to file an annual report?
Although there’s a lot of overlap in annual report content across states, due dates vary widely.
States require different filing frequencies and use different methods to establish filing deadlines. Depending on the state, you may be required to file annually, biannually, or once a decade. Your due dates might fall in a state-determined month (e.g. every January) or be based on when you originally registered to do business in the state.
These differences can make it tedious to track deadlines—especially if you have reporting obligations in multiple states. If you formed your business in New York in 2020 and registered to do business in ten other states after hiring remote employees, you might end up with six annual reports due in January, one each in June and July, one due every other December, and one due every tenth December.
Mosey’s compliance platform can help you stay on top of these deadlines. With Mosey, you can automate filing annual reports in supported states, track requirements and recurring deadlines, receive alerts for key tasks, and manage state mail all in one place.
Penalties for not filing an annual report or filing late
Most states impose fees for filing a late annual report—and if you don’t file at all, consequences can be severe.
Failing to file an annual report in your state of incorporation can result in loss of good standing, affecting your ability to open business bank accounts or obtain financing. In some cases, it can even cause your business to be dissolved entirely.
If you don’t file a report in a state in which you are registered as a foreign entity, that state can revoke your ability to do business in the state.
Mosey features active monitoring and notifications to help you stay on top of annual report filing for your company. Import your incorporation date or foreign qualification date for each state and Mosey will calculate your annual report filing requirements and deadlines automatically. They will be added to your account for easy management and Mosey will alert you when they become upcoming tasks to complete. Mosey keeps it all organized by showing you the requirements, when they are due, and who is doing what. Mosey will even automate filing the annual report for you—just click a button and we’re on it.
Read more from Mosey:
- Certificate of Good Standing: The Business Owner’s Guide to How and Why
- What Is Tax Nexus? Nexus Types & Determining Tax Nexus
- What Is Foreign Qualification? Considerations & How to Qualify
- What Is Workers Compensation & How Does It Work?
- Exiting a PEO: Reasons, Considerations, and Checklist
- Hiring Remote Employees: Everything You Need to Know
- LLC Annual Report: What It Is, What’s Included & How to File
- These 5 States Require Short-Term Disability Insurance (2023)
- What Is an LLC (Limited Liability Company)?
