Many business owners choose to form a business as a separate legal entity, such as a Limited Liability Company (LLC) or a corporation. These types of businesses give you lots of flexibility and liability protection, but you’ll also need to meet certain requirements, like filing an Annual Report.
Fortunately, it’s quick and easy to file an Annual Report, especially if you let Incfile do it for you. But, you may be wondering — if you don’t have any sales or profits during a particular year, must your LLC still file a report? Because LLCs and corporations are formed on a state-by-state basis, Annual Report filing rules do vary.
This means, depending on your state and other factors, your LLC will probably still need to file an Annual Report, even if your business has not made sales or generated profits.
However, there are exceptions. Let’s explore this further and answer any questions you may have.
Does my business type need to file an annual report?
Depending on the type of business you run, you may not need to file an Annual Report at all.
Only businesses that are “separate legal entities” must file reports.
These types of businesses are:
- A single-member LLC where you are the only owner
- A multi-member LLC that you own with other people
- An S Corporation
- A C Corporation
- A nonprofit organization
This means you do not need to file an Annual Report if you’re one of the following types of business.
- A sole proprietor
- A partnership
So, if you’re a sole proprietor or partnership, you don’t have any annual reporting requirements at all, regardless of whether you had sales or made a profit.
Does my state require me to file an Annual Report?
Most states require LLCs and corporations to file Annual Reports, but some do not.
All states require LLCs to file reports except for:
- Arizona
- Missouri
- New Mexico
- Ohio
- South Carolina (LLCs classed as S Corporations do need to file a report)
All states require corporations to file reports except for:
- Ohio
- Oklahoma
- South Carolina
If you’re in one of these states, you do not need to file an Annual Report, even if you made sales or had profits.
Are Annual Reports known by other names?
Annual Reports can be known by several different names, including business privilege tax returns, franchise tax reports, statements of information and other terms.
Do I need to file an Annual Report every year?
Most states do require LLCs and corporations to file every year, but some don’t.
States where LLCs do not need to file a report every year:
- Alaska: Every two years
- California: Every two years for a statement of information; you must file a franchise tax report every year
- Indiana: Every two years
- Iowa: Every two years
- Nebraska: Every two years
- New York: Every two years
- Pennsylvania: Every ten years
- Washington, DC: Every two years
States where corporations do not need to file a report every year:
- Alaska: Every two years
- Indiana: Every two years
- Iowa: Every two years
- Nebraska: Every two years
- New Mexico: Every two years
- New York: Every two years
- Pennsylvania: Every ten years
- Washington, DC: Every two years
If you’re in one of these states, you do not need to file a report every year, even if you made sales or had profits.
Learn when your next report is due.
When might I need to file an Annual Report for my LLC or corporation?
You will generally need to file an Annual Report in a specific year if all of the following are true:
- You own or run an LLC or corporation.
- You are in a state that requires you to file a report.
- A report is due in this specific year.
Do I need to file an Annual Report if I have not had any sales or profits in a specific year?
Generally, yes. If you answered “yes” to the previous questions, you should still file an Annual Report even if you don’t have sales or profits. An Annual Report is where you will report on any changes made to your business over the last year, which would include financial performance, whether up or down. Although these requirements may vary between states — and some states may have exceptions to these rules — we believe it’s better to file an Annual Report regardless of sales and profitability.
It's always best to err on the side of caution. The penalties for not filing a report can be severe, so it’s generally much better to file a report, especially if your state does not say otherwise. Check with your state's Secretary of State or speak to a specialist business attorney to understand if you need to file even if you don’t have sales.
Of course, the time, effort and cost of understanding fairly esoteric reporting requirements and consulting an attorney are likely to be much more expensive than filing a report in the first place. Hence our recommendation to file anyway.
Is there a fee to file my Annual Report?
Yes. Most states charge a fee to file your report.
How do I file an Annual Report?
You can either file an Annual Report directly with your Secretary of State/business formation agency, or get Incfile to file the report on your behalf.
What happens if I don’t file an Annual Report?
If you don’t file your Annual Report on time, several things can happen:
- The state will write to you and may impose a late filing penalty that you must pay in addition to your regular annual report filing cost.
- The state will tell you when you must file by to avoid further action.
- If you still do not file, your business will lose its “good standing,” which may make it more difficult to run certain business operations.
- If you still do not file, your state agency will dissolve your business and strike it off the register.
- At this point, you will lose your liability protection and won’t be able to continue as an LLC or corporation.
Are there other requirements for starting and running an LLC?
Yes, you can find a complete list of initial requirements and a list of your ongoing compliance requirements, including annual reports.
We hope you’ve found this guide to filing your annual report helpful. Remember that Incfile is happy to file a report on your behalf to ensure you stay compliant.
Paul Maplesden
Paul is a freelance writer, small business owner, and British expat exploring the U.S. When he’s not politely apologizing, he enjoys hats, hockey, Earl Grey Tea, mountains, and dogs.
