Every business is required to file an annual report with the Secretary of State. This document provides a snapshot of the company's financial status and operations from the past year. Therefore, it is essential to file your annual report on time to maintain good standing with the state. This article will discuss why it is important to file your annual report and what happens if you don't.

What Exactly is an Annual Report?

An annual report is a document that is filed with the Secretary of State's office each year. This report provides information on the company's finances and operations from the previous year. The annual report is also used to update the state on any changes to the company, such as a change of address or officers. This information allows different government agencies, investors, and the public to locate and communicate with businesses in their state. It is important to note that filing your state income tax form does not involve your annual report. In fact, from a tax perspective, the IRS doesn't care if the annual report is filed. 

Why is it Important to File Your Annual Report?

It is essential to file your annual report on time to maintain good standing with the state. Suppose your company is no longer in good standing. In that case, the business may be affected because potential creditors or buyers may refuse to do business with a company that is not in good standing. If you do not file your annual report, then your company may be subject to late fees, or the Secretary of State can administratively dissolve your company. In some cases, the Secretary of State's office may also require that you re-file all past due reports before they process any future filings. This can create a significant burden for businesses that have fallen behind on their annual reports. The bottom line is just do the report!

The Filing Deadline 

In North Carolina, the deadline to file your annual report with the Secretary of State is April 15th. To start the process, you may visit this link: NC: File an Annual Report.

If you have businesses in several states, be sure to check with each state individually, as some have filing dates in association with the date of formation or incorporation. 

Bonus Filing Tip: Filing on time is excellent but filing on time without mistakes is even better. The most common mistakes that are easy to avoid are:

• Having your report signed by someone not on the state's records as authorized to sign. This is often a spouse.

• Paying an incorrect fee or the wrong payment type.

• Filing an incomplete report. 

What Information is Needed for the Report?

 Luckily the annual report is a much simpler process than doing your taxes. The information required is pretty basic. The general details are mostly what you provided when you first filed to form your corporation or LLC; however, the specific details will vary by state and business type.

Basic information will include:

• Business address

• Member names and addresses.

• Business officers: President, secretary, and treasurer.

In conclusion, it is vital to file your annual report on time in order to maintain good standing with the state. This document provides a snapshot of the company's financial status and operations from the past year. Filing your annual report on time is simple and easy to do, so there is no excuse not to! 

Atlantic Coast Business Advisors works with clients to facilitate the sale of their business and assist investors and entrepreneurs in acquiring their next business venture.