If you’re a business manager, director, or owner, you have a requirement to follow certain rules and regulations. One of those is filing an annual report for your business. We’ll explore what an annual report is, how to file it, what it should contain, and other useful information.
One important point — When we discuss annual reports, we’re talking about formal requirements to produce a report and file it with your Secretary of State. However, you may also produce additional annual reports for your investors, shareholders, and other stakeholders. We cover those later in this piece.
Formal LLC & Corporate Annual Reports — Required by Your Secretary of State
If you’ve incorporated as a business — As an LLC, LLP, S-Corp or C-Corp, you must file an annual report, normally with your state’s Secretary of State. This applies no matter how big or small your business is. Typically, sole proprietors and partnerships do not have to file an annual report.
What is Contained in an Annual LLC or Corporate Report?
- Annual reports vary in complexity and typically include the following:
- The principal business (head office) address of the company.
- The names and addresses of the managers of the business (directors and officers in a corporation, members and managers in an LLC).
- Important identification numbers for your business.
- The purpose of your business.
- Authorized signatories and registered agents.
- The number of shares of stock issued by the business.
The purpose of an annual report is to keep your state informed on any changes to the details or ownership of your business — For example if the business has changed locations or has new directors or managers.
How to File Your Annual Report
If you do need to file an annual report for your LLC or corporation, you can normally do so online, through your state’s website. In addition to filing your annual report, you will also need to pay a fee — These fees do vary from state to state and could range between $50 and $400.
Due Dates for Your Annual Report
In some states, the annual report is filed on a predetermined date for all entities regardless of the date of formation. Other states require the annual report is filed on the anniversary date of formation. The due dates for corporate annual reports do vary from state to state, so find your filing date from your state’s website and put it in your calendar.
When is an Annual Report Not an Annual Report?
- Some states only require you to file a report every two years, so that’s a “Biennial report.”
- Some states call annual reports from LLCs “Statements of Information.”
- Some states will also require you to file other business documentation if important details of your business have changed.
Failing to File an Annual Corporate Report
The consequences of not filing an annual report can be severe. Some states may levy late fees, penalties and taxes. Other states could even involuntarily dissolve your corporation.
Business and Financial Annual Reports
In addition to formally filing a corporate annual report, you may also produce business and financial reports for investors, directors, managers and other stakeholders. Although there are no “legal” requirements for what these reports should contain, there are certain conventions for what’s included.
Business Financial Reports
Every business exists to make a profit, so finances are most often at the heart of a business annual report. Ways to present this information include:
- Balance sheet: Information on the various financial assets, liabilities, cash-n-hand and other key factors of the finances of a business at a particular point in time.
- Profit and Loss (P&L): The income, outgoings, revenue, expenses, and profits of a business.
- Shares and stock issued: The volume and value of stock that’s been issued, either privately or publicly.
- Financial projections and forecasts: Likely projected revenue and profits.
Other Business Reports
An annual business report can also include several other areas:
- An executive summary: All the key financial and other important information about the business, on one page.
- Letter from the chairman / board of directors: A short message on business performance, outlook, and other important areas.
- Opportunities: Any major opportunities for growth and expansion.
- Risks: Any potential threats or issues to the business and how they’re being addressed.
Whether you’re filing a formal corporate annual report for your LLC, S-Corp or C-Corp, or you’re creating other business and financial reports, ensure you understand exactly what’s required from you. Here at IncFile, we’re experts at making sure your annual reports are perfect. Save yourself the time and effort of preparing and filing your annual report, and let us take care of things.