Do you remember when you incorporated or created your limited liability company (LLC)? You did a filing with your state’s Secretary of State (some states use other agencies for this filing). If you expanded your territory to include other states, you needed to file for a Certificate of Authority to Transact Business as a foreign corporation or LLC (or a similar name for this document).
Most states have a requirement that you file an annual report with the Secretary of State’s Office or maybe the Franchise Tax Board. The filing times vary by state. The annual reports are designed to let the state know that you are still in existence, that you haven’t changed your registered agent, that you haven’t moved your offices, and that your officers, directors and/or members are still the same. Usually, there is a small fee to be paid. If there are changes, you are supposed to notify the state of those changes. Franchise board filings tend to be just a requirement to send a franchise fee to that state.
The consequences of not filing the annual report can be that you may eventually lose the right to legally transact business in that state and that the fees that are owed will continue to be owed and may incur interest and penalties. This is true even if you have stopped transacting business. it can also jeopardize your ability to renew your licenses.
You must file your annual reports on a timely basis. If you are not sure when you need to file, contact the Secretary of State (or whichever agency is in charge of corporate and LLC filings) or hire an outside company to do the filings for you (either a law firm or company that provides this service). If you have stopped doing business in that state, make sure the proper withdrawal documents are filed with that agency and pay the required fee. If you fail to do this, it could get quite expensive for your company.
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