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.
Showing posts with label annual report. Show all posts
Showing posts with label annual report. Show all posts
Monday, March 28, 2011
Tuesday, March 22, 2011
Getting Annual Report Correspondence to The Right Person
I’ve been writing a lot recently about the annual reports that are due at the beginning of the year. A whole bunch are due at the end of March. This is in addition to or instead of the Mortgage Call Report that will start becoming required at the end of April.
Some states send letters in January or February with log-in information for their online reports. These letters typically go to one of the owners in the mortgage company. Unless the owner is the one who will be preparing the Annual Report or inputting the Annual Report, my experience is that this letter will likely get mislaid. If you are receiving a letter from a banking department about the Annual Report, and you have either appointed someone in your company to prepare and input the Report or are using an outside company or law firm for Annual Report submissions, please forward these letters immediately to that person. If you are now scrambling to find that letter, have your outside company or law firm call the banking department to get them to re-send the letter. Then, send a letter to the banking department, on company letterhead and signed by an owner of the company, requesting that the banking department send all correspondence in the future to your outside company or law firm. It will save you a lot of aggravation and time that you won’t need to spend looking for a letter that you may not understand that you need.
Some states send letters in January or February with log-in information for their online reports. These letters typically go to one of the owners in the mortgage company. Unless the owner is the one who will be preparing the Annual Report or inputting the Annual Report, my experience is that this letter will likely get mislaid. If you are receiving a letter from a banking department about the Annual Report, and you have either appointed someone in your company to prepare and input the Report or are using an outside company or law firm for Annual Report submissions, please forward these letters immediately to that person. If you are now scrambling to find that letter, have your outside company or law firm call the banking department to get them to re-send the letter. Then, send a letter to the banking department, on company letterhead and signed by an owner of the company, requesting that the banking department send all correspondence in the future to your outside company or law firm. It will save you a lot of aggravation and time that you won’t need to spend looking for a letter that you may not understand that you need.
Monday, March 7, 2011
Do You Still Need to File an Annual Report?
Once upon a time, just about every state required its own form of Annual Report. Most of them were due in the first 4 months of each year. Recently, the Nationwide Mortgage Licensing System sent out an email that functionality for a Mortgage Call Report that would be required quarterly, starting in April, 2011. Does this mean that you are not required to file an Annual Report?
The short answer is that it depends on in which state you are licensed. Most states which had required annual report filing still have the same requirements as in previous years. Some of the questions have changed but most of the reports that I have seen so far look quite similar to past years’ reports.
The Mortgage Call Report is required by the SAFE Act and will be a report that is in addition to the Annual Report that may still be required. All states will be requiring that you complete the Mortgage Call Report. But not all states require an Annual Report. You must check with your state agency that oversees your license if you are not sure that you need to file an Annual Report. Be aware that most Annual Reports also require financial statement reporting so you may need to get your accountant on top of this requirement immediately. You should also be aware that one (1) Mortgage Call Report will be sufficient for all states in which you are licensed.
There is plenty of aid out there to help you get your information organized and inputted on the Annual Report form so that your filing is timely. You really do not want to be late. The penalty may exceed the cost of hiring someone to help you.
The short answer is that it depends on in which state you are licensed. Most states which had required annual report filing still have the same requirements as in previous years. Some of the questions have changed but most of the reports that I have seen so far look quite similar to past years’ reports.
The Mortgage Call Report is required by the SAFE Act and will be a report that is in addition to the Annual Report that may still be required. All states will be requiring that you complete the Mortgage Call Report. But not all states require an Annual Report. You must check with your state agency that oversees your license if you are not sure that you need to file an Annual Report. Be aware that most Annual Reports also require financial statement reporting so you may need to get your accountant on top of this requirement immediately. You should also be aware that one (1) Mortgage Call Report will be sufficient for all states in which you are licensed.
There is plenty of aid out there to help you get your information organized and inputted on the Annual Report form so that your filing is timely. You really do not want to be late. The penalty may exceed the cost of hiring someone to help you.
Monday, January 31, 2011
Filing Reports with the State Regulators and the NMLS
Several of my clients and the NMLS have sent an email about a new reporting requirement. Within forty-five (45) days after the end of each quarter, all mortgage companies must file a report through the NMLS, reporting their mortgage activity in each state in which they are licensed or registered. If the company does not submit the report, then each loan originator in that company must file his/her own report. Each company must also submit a financial condition report (basically, an unaudited financial statement) once a year, within ninety (90) days after the end of the company’s fiscal year.
Many states are still requiring their own form of annual report in addition to the quarterly filings that you will need to start doing. These states (e.g., Pennsylvania, Virginia, Washington D.C., California, and Massachusetts) have, in the past, required elaborate paper or electronic forms, with financial information, loan activity, names of appraisers, title companies and lenders with whom they do business, and warehouse line of credit information. For 2011, many of these states have already sent out their forms to their licensees. If you are licensed in a state in which you have, in the past, filed an annual report, you must check with that state to find out whether they have changed their annual reporting requirement. These annual reporting requirements are in addition to the new NMLS quarterly reporting requirements.
As you know, some of the state annual reports are quite lengthy and take a fair amount of time to prepare. If you are too busy to get your reports ready, hire an outside company or law firm to do them for you. It is true that the SAFE Act has increased the amount of regulation reporting with which you must comply. Don’t let ignorance of the new compliance requirements and lack of time to organize your office to carry out your compliance obligations cost you in enforcement penalties and fines.
Many states are still requiring their own form of annual report in addition to the quarterly filings that you will need to start doing. These states (e.g., Pennsylvania, Virginia, Washington D.C., California, and Massachusetts) have, in the past, required elaborate paper or electronic forms, with financial information, loan activity, names of appraisers, title companies and lenders with whom they do business, and warehouse line of credit information. For 2011, many of these states have already sent out their forms to their licensees. If you are licensed in a state in which you have, in the past, filed an annual report, you must check with that state to find out whether they have changed their annual reporting requirement. These annual reporting requirements are in addition to the new NMLS quarterly reporting requirements.
As you know, some of the state annual reports are quite lengthy and take a fair amount of time to prepare. If you are too busy to get your reports ready, hire an outside company or law firm to do them for you. It is true that the SAFE Act has increased the amount of regulation reporting with which you must comply. Don’t let ignorance of the new compliance requirements and lack of time to organize your office to carry out your compliance obligations cost you in enforcement penalties and fines.
Tuesday, February 13, 2007
Mortgage Licenses and Annual Reports
Once you have your license as a mortgage broker or lender, you still have regular contact with the agency that granted you the license. Just about every state requires an Annual Report. Most of them are due in the first 4 months of each year.
The first one that you file is obviously the most daunting. You've never seen the form before, you didn't know that you should keep the information that is being asked for and they may even require that you input the information onto their form online.
The states will send out a reminder that the Annual Report is due in 2 months (this is the typical amount of notice that the states give). At this point, you should appoint someone in your office to gather the information that will be needed for each state. Although some of the information is common to all of the Annual Reports (i.e. information on your profit and loss statement and your balance sheet), how many loans and the total dollar ammount of the loans you closed in Virginia will not help you with the California Annual Report. Depending on how many states you are licensed in, this can be a very time-consuming job. And that person needs to keep track of the dates that each Annual Report is due.
For states that require that you submit certified financial statements each year, you have to give your accountant enough notice so that this work can be squeezed into his busy tax season. Most states do not have any mechanism for allowing an extension of time if your accountant can't get your certified financial statement together on time. You will be facing fines and penalties from each state in which your financial statement is late.
The second year and every year after should be easier when you know what will be asked for. Just create a computer program to store and retrieve the information that you know each state will need. But also be aware that each state can ask for additional information that it had not asked for in the previous year.
There is plenty of aid out there to help you get your information organized and inputted on the Annual Report form so that your filing is timely. You really do not want to be late. The penalty may exceed the cost of hiring someone to help you.
The first one that you file is obviously the most daunting. You've never seen the form before, you didn't know that you should keep the information that is being asked for and they may even require that you input the information onto their form online.
The states will send out a reminder that the Annual Report is due in 2 months (this is the typical amount of notice that the states give). At this point, you should appoint someone in your office to gather the information that will be needed for each state. Although some of the information is common to all of the Annual Reports (i.e. information on your profit and loss statement and your balance sheet), how many loans and the total dollar ammount of the loans you closed in Virginia will not help you with the California Annual Report. Depending on how many states you are licensed in, this can be a very time-consuming job. And that person needs to keep track of the dates that each Annual Report is due.
For states that require that you submit certified financial statements each year, you have to give your accountant enough notice so that this work can be squeezed into his busy tax season. Most states do not have any mechanism for allowing an extension of time if your accountant can't get your certified financial statement together on time. You will be facing fines and penalties from each state in which your financial statement is late.
The second year and every year after should be easier when you know what will be asked for. Just create a computer program to store and retrieve the information that you know each state will need. But also be aware that each state can ask for additional information that it had not asked for in the previous year.
There is plenty of aid out there to help you get your information organized and inputted on the Annual Report form so that your filing is timely. You really do not want to be late. The penalty may exceed the cost of hiring someone to help you.
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