Annual Report

An Annual Report is a mandatory yearly filing with the state in which your business was formed regarding your business. Not all states have annual reports, and not all types of entities are required to file one. For example, New Mexico has no annual report for LLCs, but has a biennial report for corporations. Other examples include New York which requires companies to file biennial reports (once in two years), and states such as Delaware that has no annual report for LLCs, but instead charges a Franchise Tax.

What does an Annual Report include?

An Annual Report and its equivalents usually includes brief statements regarding profits or losses, information for investors and shareholders on the growth and direction of the business, as well as updated information on business purpose, function and operating details. Annual Reports are also required to include any changes made to your business throughout the year, such as location, management and service type.

When do you have to file?

Most states set the deadline for the anniversary of the business entity’s formation date. For example, if your business was formed on October 31st, 2011, your annual report would be due at the end of October, 2012. Other states (e.g. Florida, Delaware) have predetermined due date for all annual reports and similar filings.

Note: Some states require Biennial Reports. These states are:

• Arkansas
• California (annual for corporations, biennial for LLC)
• Washington D.C.
• Iowa
• Indiana (annual for non-profits)
• Nebraska
• New Mexico (annual for non-profits, biennial for corporations, LLCs are exempt)
• New York
• Ohio

Who has to file an Annual Report?

With a number of exceptions, all businesses (including non-profit organizations) within the United States are required to file reports with their respective states. States typically send reminders (physical mail, and in some cases email) when the report is due, however it is important to research the rules pertaining to your particular entity in your specific state in order to make sure your company always files its reports on time.

How much does it cost?

Most states carry a filing fee for their Annual Reports. These fees vary state to state, typically between $50 and $400.

Every state is different. Some states do not charge a fee to LLCs. Others charge LLCs much more than Corporations.

In addition, many states collect what is called a “franchise tax” at the same time as the annual report is filed. The amount of tax depends on the amount of business transacted by your company in that state in the last year (or 6 months) and on the value of business’s property owned in the state, but the minimums range anywhere from $50 to $800 (California).