CORPORATE TRANSACTIONS & COMPLIANCE BLOG

Frequently Asked Questions About Annual/Periodic Report Compliance

By: Vincent Blond, COGENCY GLOBAL INC. on Thu, Jan 12, 2017

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Compliance is a prevalent concern for all businesses due to the ever increasing number of regulations that must be met. One aspect of “compliance” for business entities involves filing informational reports in states where the company is doing business. Most states require registered entities to file a yearly/periodic informational report in order to maintain good standing and remain compliant with the state.

It seems simple enough, however, since each state has different requirements, companies that operate in all or many states can find it challenging to understand and keep track of what they have to do. Hopefully, the answers to the frequently asked questions below will help to clarify some of the variations and exceptions in how annual/periodic reports are handled across the country.

Do all states call these required informational filings “annual reports”?

No, there is a lot of variation in how each state refers to this required filing. For example, in Connecticut, Idaho and many other states, this report is referred to as an “Annual Report”, while in California it is called a “Statement of Information”. Below is a list of some of the commonly used names across the nation:

  • Business Renewal
  • Annual Report
  • Annual Renewal
  • Annual List
  • Statement of Information
  • Business Entity Report
  • Periodic Report
  • Annual Registration

Is the solicitation I received legitimate?

The different names for the informational reports in each state are confusing enough, but add to it the fact that there are companies who purposefully confuse you further. These deceptive firms mail scam notices that look official and offer to provide, for a fee, services that either are not required in the state where the entity is registered or that you can easily handle yourself at no cost. If you receive a notice like this and are not sure if it is legitimate, visit the Misleading Annual Report and Compliance Solicitations page of our website to learn about the latest deceptive solicitations and view samples of them.

Do all states require an annual/periodic report filing?

An informational report is generally, but not always, required for every entity type in most jurisdictions.  Some states may require reporting for corporations, but not limited liability companies or other entity types and vice versa.  For example:

  • In Ohio, foreign and domestic limited liability partnerships are required to file biennially, while a foreign professional corporation is not required to file and a domestic corporation is required to file. Nonprofits are required to file every five years. Corporations and limited liability companies are not required to file a periodic report.
  • Arizona, Missouri, New Mexico and South Carolina all require corporations to file periodically, but limited liability companies are not required to file at all.

It is important to thoroughly review each state’s statutory requirement based on the type of entity and whether it was domestically formed or foreign qualified in the specific state.

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What information is required when I file an informational report?

While each state’s annual/periodic information report may be different, there is basic information that is required in most states. Common questions that are asked on the majority of information reports for the different states include:

  • Where is the entity’s principal place of business?
  • What is the name and address of at least one officer (member/manager, if an LLC) for this entity?*
  • What is the name and address of at least one director for this entity?
  • What is the name of someone who is authorized to complete and/or file this report on behalf of the entity?
  • What is the nature of company’s business?

*Some states do require the listing of multiple, and sometimes very specific, officer titles on the annual information reports.  Below are a few examples, but this does not include every possible scenario:

  • For corporations, California requires the names of the CEO (or equivalent), Secretary (or equivalent) and CFO (or equivalent) to be listed on the annual report.
  • Oregon corporations must list a President and Secretary on the annual report.
  • New York corporations must list the CEO on the biennial report.

When are my company’s informational reports due?

Individual state statues govern and regulate the varying due dates for these informational reports within each state. These due dates vary widely from state to state and can also be based on the type of entity. States calculate these due dates differently.  Some commonly use the anniversary date of the entity’s formation or qualification or the last day of the entity’s anniversary month. Some states, such as Minnesota, have all Annual Renewal Reports due on the same day (12/31) each year for all entity types (corporations, limited liability companies, etc.). Some states use other criteria, such as the entity’s fiscal year end.

Annual/Periodic Report Due Dates Based on Entity’s Fiscal Year End

  • Alabama (corporations, limited partnerships and LLCs)
  • Kansas (corporations, nonprofits, limited partnerships and LLCs)
  • Massachusetts (corporations, and nonprofits)
  • New Mexico (corporations and nonprofits)
  • North Carolina (corporations)
  • South Carolina (corporations and nonprofits)
  • Tennessee (corporations, nonprofits, LLPs and LLCs)
  • Vermont (corporations and LLCs)

What other information may be required when filing my annual/periodic report?

Some states require the listing of specific financial data in conjunction with the informational report filing. This additional information is commonly required for for-profit corporations and varies from state to state.

Do all states require our financial information to be listed?

No, approximately 25% of states require the listing of some financial information when filing a corporation’s annual report. These include:

  • Alabama
  • Arizona
  • Arkansas
  • Delaware
  • Illinois
  • Maryland
  • Massachusetts
  • Michigan
  • Oklahoma
  • Rhode Island
  • Texas
  • West Virginia
  • Wisconsin
  • Wyoming

What basic financial information is requested on these annual reports?

An entity’s stock structure is commonly required on an annual report.  General stock information requested may include:

  • The class of the stock (common/preferred)
  • The number of authorized shares of stock
  • The number of issued shares of stock
  • The number of outstanding shares of stock
  • The par value of the stock
  • The name(s) of any shareholders and sometimes the percentage of ownership

For what period of time is the financial information required?

State requirements for the date range of financial data vary but usually fit one of the following criteria:   

  • Current day – The financial information of the entity as of the day the report is being filed. (Arizona)
  • Fiscal year end – The financial information of the entity is for the specific fiscal year end that is listed on the report. (Massachusetts)
  • Calendar year end – The financial information of the entity as of 12/31 of the prior year (Delaware)

Is there a change in cost when filing the report based on the financial information I supply?

The answer to this question varies greatly based on the state in which you are filing. Usually, if you are required to pay a franchise or corporation tax along with the annual report, then the fee changes based on the financial information disclosed.  As a sample, the following states require a fee based on the financial data provided:

  • Arkansas (foreign and domestic corporations)
  • Wyoming (foreign and domestic corporations)

Can a change or amendment be filed if the financial information provided on the annual report is inaccurate?

Yes.  Each state customarily allows an amendment filing to change the financial information that is on record with the respective Secretary of State. These amendment forms can be found on each state’s website. 

For example, Illinois requires the financial information on the current report to match what is on record with the Secretary of State. If they are not a match, an amendment (BCA 14.30 form) must be included with the annual report submission to avoid rejection.  If you are unsure of what financial information was listed on the last filed annual report, you can order a copy of the last report from the Secretary of State for an additional fee. 


Where can I find the annual report forms?

The annual report forms can usually be found online on the Secretary of State websites. There are some states that require electronic filing of the annual reports via the states website. Most times, these states will require payment by credit card, state account or ACH transfer.

Are the annual reports and tax returns always separate?

No, there are a few states in which the tax return is filed in conjunction with its annual information report. Below is the list of the states that this applies to:

  • Alabama
  • Maryland
  • Oklahoma
  • South Carolina
  • Texas

Compliance is an ever growing and continually changing concern for all companies, from the large conglomerate to the small family owned corporation. If your company handles all of its annual/periodic report filings, it is important to fully understand the requirements in each state where you are registered to ensure ongoing good standing and compliance. Seeking the assistance of a competent attorney, tax consultant or service company can make the process a lot easier and help to ensure your reports are being handled properly.

 

This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice. 

Topics: Annual Report Compliance