What this is: In Puerto Rico, filing an annual report is a legal requirement for corporations and limited liability companies (LLCs) to maintain compliance with the government and keep their status in good standing.
What this means: The annual report provides the Puerto Rico Department of State with important information about the entity, such as its name, registered agent and financial data. Failure to file an annual report on time can result in penalties and possible revocation of an entity's status.
1. File on Time!
Annual Reports in Puerto Rico are due on April 17th this year. Corporations that were formed the previous year must file an annual report or an extension by that date or face sizeable penalties. Even if the entity was formed as late as December 31st, 2022 it will owe an annual report for 2022 on April 17th of 2023. LLCs are required to submit minimal information and the annual fee by this date too.
The fee for filing Corporation annual reports is $150, and for LLC is $250. Any company that misses the April deadline is assessed a penalty, plus interest.
If necessary, an extension can be filed, rather than an annual report, by paying the annual report fee in full, but not submitting the completed report. This will extend the filing deadline till June 20th (August 21nd if an additional extension is filed).
If your corporation has been delinquent in prior years, this is the year to submit those past due filings! Failure to file two consecutive years could result in the entity being revoked by the Puerto Rico Department of State.
2. Don't Wait for a Reminder Notification
Puerto Rico does not send out any notification that the annual report is coming due. Corporations and limited liability companies need to track this requirement and ensure they file on time.3. Avoid Delays by Filing Online
In the last year, Puerto Rico has greatly expanded the ability to file a number of documents electronically and has an easy-to-use online system for filing annual reports. The system will reflect the filing immediately and using it will help you to avoid delays often experienced when submitting paper filings. Do not be disconcerted by the Spanish-only homepage! The pages for filing the annual reports can be viewed in English by clicking the American flag in the upper right-hand corner, giving you access to instructions and information in English. To file an annual report online, you must be authorized as either an employee/owner of the corporation or as a certified public accountant, attorney or paralegal.
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4. Gather the Information You Need
LLCs merely have to pay the $150 fee and present basic information about the company (name, register number and whether the LLC is foreign or domestic). The annual reporting requirements for corporations are a bit more involved. Corporations must provide the following information on an annual report:
- Name, register number and whether the corporation is foreign or domestic.
- Whether the volume of business exceeds three million dollars.
- Name, address, telephone number and e-mail address of the corporation’s designated office in Puerto Rico and its registered agent. (These should be the same.)
- Name, mailing address and date of the expiration of the term of at least two officers of the corporation.
- Financial Statement: Every corporation must present a financial statement for the corporation. If the volume of business is under three million dollars, the statement must be prepared in accordance with GAAP. If the corporation’s volume of business is over three million dollars, then the statement must be audited by a certified public accountant licensed to practice in Puerto Rico.
5. Review Your Online Status to Ensure Records Are CorrectPuerto Rico will accept the current year’s annual report, even if previous annual reports are past due. To ensure that you are in compliance and that Puerto Rico’s online system reflects that all annual reports or annual fees due have been filed for your entity, run a search on the company name. The tab “annual filings” will display the annual reports filed or fees paid for the company. (Note that for LLCs, the phrase “annual due” appears. This does not mean that the annual fee is due, but that the annual dues have been paid.) If there are past-due annual reports from previous years, these will need to be submitted using a paper filing.
Puerto Rico’s online system has greatly expanded and improved over the past year and, if you follow the tips above, it is likely you will have no difficulties filing your annual report in a timely way and avoiding a sizeable monetary penalty.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.