LLC Annual Reports » Understanding the Requirements for Filing

When an individual makes the decision to establish a limited liability company (LLC) in the state of California, it is important to prepare a complete LLC annual report. This document is filed with the Secretary of State and is required to be filed within 90 days. Information required in this document must be true, accurate, and not misleading. It should also show the status of the LLC, including the LLC’s file status and current status. If the LLC has been terminated or suspended, the file status should reflect that.


Filing the Annual Report

The entire contents of an LLC annual report must be filed along with the proper filing fees. Fees are due at the close of business on the last day of the fiscal year. Because filing fees are sometimes paid in one lump sum, it is good practice to order the documents and payment in advance of the due date. By doing so, the secretary will receive a payment of less than ten percent of the total outstanding costs. The LLC will make payment by check or cash and send the check-in a separate envelope.

In many states, the paperwork is filed electronically. In California, most LLCs must file an Annual Report with the Secretary. Online filing is allowed in certain states. The filing fee for an online filing is generally less than paper filing. A virtual file management system may be available at the office of your registered agent.

Fees Involved in Annual Reports

All fees for an LLC must be paid before assets can be transferred. However, there are some common tax benefits that apply to all LLC filings, even those with no federal tax returns. Franchise tax credits and federal income tax returns are two of these benefits. The franchise tax credit is based on the income of the business and must be claimed in the financial statement if the business is a franchise. The income tax returns must be submitted on Schedule C, which is on a quarterly basis.

Filing an Annual Report with the Secretary is not required, but many companies choose to do so anyway. By doing so, they are acknowledging receipt of a notice of Federal Tax Lien and acknowledge the right to appear and defend against that notice. It also provides the basis for future negotiations with IRS and enables timely reporting to the IRS about changes in ownership or tax liability. Not everyone knows how to file an annual report for their LLC. Some simply refer to the forms that must be filled out.

Seeking Help in Filing

Because an LLC filing is a big-time commitment for many people, some choose to skip the entire process. Others seek out help from experienced professionals or companies that have experience preparing and filing all types of paperwork for LLCs. The best way to ensure filing is done correctly is to ensure that your chosen service has the necessary information required for proper submissions. Many accountants, lawyers, and financial advisers can help with this process. They can even assist in the submission and filing process.

The next step in the process is to set up an account with the Secretary. The account can be separate from the LLC and paid via the internet. A bill must be paid to the Secretary by the LLC by the due date, which is typically six months following the filing of an LLC Annual Report. After an LLC Annual Report has been submitted and approved by the Secretary, the due date must be called by the Secretary, who then considers the information submitted to determine if there is a balance due or if the LLC is still valid.

Checking Balance When Filing

If there is still a balance due on the LLC, it will then be called for payment by the Secretary. Again, the due date must be met. One important point to remember is that if the LLC has been suspended for 90 or more days, the Secretary will consider it dormant and may not even consider any further action on it. Also, if the LLC has been inactive for more than two months, the Secretary may consider it qualified to become actively involved. There is also a possibility that the LLC will have to pass its test to become recognized as a qualified LLC. Once the filing process is complete, the LLC will be able to open for business and will have to meet all the requirements necessary for it to stay operational.

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