So you have begun with your new business. Now, how would your state keep a record of your corporate information every year? The annual list can help you! The Annual List is an update to your corporate data listed with the state. All businesses are required to file an Annual Report of members, managers or corporate officers and also need to submit an annual business registration fee. You can annually update membership and ownership information, marketing and mailing addresses, and registered agent information.
Let’s get into each and every minute detail of the annual report:
What is an Annual Report?
Company annual reports produce information on the status of your company to stakeholders, shareholders, the community, and media. Annual lists come in many formats, varying from basic typewritten sheets to full-color, glossy publications. Knowing the purpose of the annual report can assist you in ensuring that your report contains appropriate information for your publics.
In Nevada, every corporation or LLC is expected to file an Annual List by the last day of the anniversary month of their organization in Nevada. So, if a corporation were formed on December 1st, the Annual List would be due on December 31st of the following year and every year afterward. The Annual List is due regardless of whether an LLC or corporation has handled any business in or out of the state. To stay updated, the Annual List must be filed regularly without any fail. The Annual List fee in Nevada for LLC is $350 and for corporation is $650.
Are there other names for an Annual Report?
The name Annual Report is same in all states, but different states call it by different names. Some examples are:
What is the purpose of filing an Annual Report?
There are three main goals of the Annual Report which includes promoting the company for a public corporation, displaying the financial goals and performance and meeting the regulatory requirements.
Serving a marketing and PR function
A large portion of a annual report is dedicated to all the accomplishments of the company during the previous year and its expectations for the following year. The purpose of this material is to keep the existing shareholders pumped up about the wisdom of their investment and to invite new shareholders into the fold.
Stating financial performance and goals
The portions that attract serious investors are the sections addressing the corporation’s financial performance in the previous year. Information in these sections indicates how closely the company came to running projected revenue figures. Along with it, the company addresses how it plans to improve the financial performance going forward.
Here are some examples of financial goals:
- Raising revenue by extending into global markets.
- Carving a niche as a prime employer.
- Leading operations for exceptional effectiveness.
- Raising brand awareness. Brand awareness is an excellent way of maintaining the company reputation and making sure consumers recognize the company and its signature products. The aim of the brand awareness is also to make the company’s products preferred over related ones marketed by the competition.
Meeting regulatory requirements
Annual reports are a great PR and marketing tool, so many large companies like to produce it even if their state governments do not need it. However, for publicly traded companies, who need to adhere to severe regulatory requirements, not issuing an annual report isn’t an option.
Companies that issue publicly traded securities along with companies that satisfy specific criteria have to file annual reports with the U.S. Securities and Exchange Commission (SEC). This specific report needed by the SEC is called Form 10-K.
To avoid creating two separate types of annual reports, some companies add their reports to shareholders including all the information that the SEC requires in the Form 10-K.
Is an Initial Report the same as an Annual Report?
As the name suggests, initial reports are exactly what they are called. They are the reports filed at the initial phase of the formation of a Corporation or LLC. Different states have varied requirements, but the necessary information is usually the same. The initial report generally 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 officers, directors, and members of the new entity. Finally, it needs to disclose what the business actually does. As at the time of 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.
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. Before sending it in, double check the form to make sure all of the information is correct.
What is the difference between an Annual Report and a Franchise Tax?
Distinguishing an Annual Report from a Franchise Tax Report can be confusing, since in some states an Annual Report is called an Annual Franchise Tax Report. The name of the report doesn’t always indicate exactly what it is, so you’ll need to know the state office you’re required to file with. All states are different, and in some states you may need to file an Annual Franchise Tax with the Secretary of State (similar to an Annual Report), and in others you may need to file a Franchise Tax with the Department of Taxation or Franchise Department.
Are Annual Report requirements the same in all states?
The information required for an Annual Report differs from state to state. It can also differ within a state among business entity types.
The business entity statutes prescribe the minimum required content. The filing office may be authorized to require additional information that will aid in the filing process. Typically, however, the report must set forth, at a minimum:
- The company’s legal name
- In the case of a foreign company, the fictitious name it qualified under, if any
- The principal office address in the state, if any
- The principal office address where located
- The registered agent’s name
- The registered agents office address
- The names and business addresses of directors and officers (for a corporation), managers and members (for an LLC) or partners (for an LP or LLP)
The states also vary greatly when it comes to filing details. For example:
- Some states require Annual Reports to be filed before a fixed calendar date. Other states have a due date based on the anniversary of formation or qualification.
- Some states prepare forms for each company, preprinted with the most current information on file. Others provide blank forms that must be filled out.
- In some states the information report may be delivered to the filing office in paper form or electronically. Others will only accept reports that are filed electronically.
- Most states require a filing fee to accompany the report. The fee may be a flat rate or it may be a variable. A variable rate may be based on a corporation’s authorized shares, the number of an LLC’s members or an LP or LLP’s partners, or some other basis. Some states charge nonprofit corporations no fee or a reduced fee.
Failure to File
The states impose penalties on companies that fail to comply with the Annual Report requirement. If the report is not filed by the due date a late fee will be charged. Continuous non-compliance can result in the delinquent company falling out of good standing. This means the state will not issue a certificate of good standing or file documents for it. Further non-compliance can result in the administrative dissolution of a domestic company and the administrative revocation of the authority to do business of a foreign company.
Will my Annual Report due date be the same every year?
It depends on the state laws where you’ll file your Annual Report. States have the ability to change the requirements surrounding Annual Reports at any time, with or without notice. To be safe, always ensure that you’ve researched the most up to date state requirements, so you don’t miss the filing deadline.
What happens if I ignore or miss my Annual Report due date?
Missing an Annual Report due date can have major consequences. A company’s good standing status and even its rights to exist can be jeopardized through ignoring annual report requirements. A company may also incur monetary penalties for not filing their report on time. If you are late to file your annual report, depending on the state, you’ll have to pay penalty fees and reinstatement fees, both of which are much higher than the price of actually filing the annual report for the first time.
Can I make amendments to my company information when I file my Annual Report?
When you first file to become a legal business entity, part of the process include creating Articles of Incorporation or Articles of Organization. The information that you submit contains the name of the business, which business structure best suits your needs (such as an LLC, S Corporation, C Corporation or a Nonprofit Corporation), the appointed registered agent’s name and contact information, the effective date in which you started the business and the names of the current partners or shareholders.
As time passes and businesses evolve, you may find that you are in a situation where your business name no longer fits the services you provide or perhaps the leadership team of your company is undergoing changes. Any major event that alters the information on your Articles of Incorporation or Articles of Organization needs to be reported to your secretary of state by filing an Articles of Amendment form.