Annual reports: the deadline that quietly dissolves companies
Most owners think of forming a company as a one-time job. The state does not. In most states, your company has to check in every year or two, and a company that stops checking in is eventually treated as if it no longer exists.
What the annual report is
It is a short filing that confirms who runs the company, where its registered agent is, and its principal address. In most states it takes a few minutes to fill in. Some states call it an annual list, a statement of information, or a biennial report.
It usually comes with a fee. Some states also attach a franchise or privilege tax, which is separate from income tax and is owed whether or not the business made money.
When it is due
There is no national calendar. Depending on the state, it can be due:
- On a fixed date for every company in that state
- On the anniversary of the month you formed
- Every other year rather than every year
A handful of states, including Ohio and Arizona, do not require an annual report from an LLC at all. Others require one and also charge a minimum annual tax, which surprises owners who assumed a company with no income owes nothing.
What happens if you miss it
The order is roughly the same everywhere:
1. A late fee or penalty 2. The company falls out of good standing 3. After a further period, the state administratively dissolves or forfeits it
Losing good standing is not just a label. Banks and lenders check it. Some states will not let a company in bad standing bring a lawsuit. Contracts and licenses can be put at risk.
Dissolution is worse. Depending on the state, your company name can become available to someone else, and the liability protection you formed the company for can be questioned for the period it was dissolved.
Getting back in
Most states allow reinstatement. It usually means filing every missed report, paying every missed fee and penalty, and paying a reinstatement fee on top. It is almost always more expensive than the reports would have been.
Why it gets missed
The reminder goes to the registered agent address. If you were your own agent and moved, or used a friend's address, the notice went somewhere you are not. Most missed reports are not decisions. They are letters nobody read.
Keeping it simple
- Know your state's due date and put it in your calendar on the day you form
- Use a registered agent that forwards state mail and tracks the deadline for you
- Keep the company's addresses current with the state
- If you form in one state and register in another, remember there are now two reports