Elaine is a Senior Specialist at ReSource Pro Compliance
Once a business registers with the Secretary of State’s Office in a domicile or foreign jurisdiction, it needs to keep that information current. In most states, this is done by filing a statement with the SOS on an annual basis, thus the name, “annual return” or “annual report.” In other jurisdictions, however, a return is due only every other year. There are even states where certain types of business entities must submit a return only every 5 years.
In addition to these different filing periods, deadlines may also vary. Returns may be due on or before an arbitrary date determined by regulators, within a certain period after the end of the entity’s tax year, or by a date based on the anniversary of its initial business registration.
It’s also common for the various business types to have different filing requirements and deadlines—even within the same jurisdiction. So if an entity undergoes conversion to another legal structure, the old compliance schedule may no longer apply.
The Filing Process
Most states now offer a fully or partially online filing process. For security reasons, most states also don’t allow registrants to save a partially completed return and come back to it later. If filers don’t complete the online form in a timely manner, the session may “time out,” erasing all the information entered. Some sites even don’t allow the use of a browser’s Back and Forward arrows. Thus, it’s essential to have all the information needed to complete the return on hand before beginning.
What’s Included in an Annual Return
While specific requirements can vary by state and/or a business’s legal structure, most annual return forms require the following information:
Business Name
This is the true, legal name of the entity, as it appears on its Articles of Incorporation/Formation and as registered with the Secretary of State’s Office. However, if regulators require a business to use a Doing Business As or fictitious name—usually to comply with state rules—that’s the name to use.
Some states ask foreign entities to list both their name in the foreign state and their name in their domicile state.
State-Issued Identification Number
Some Secretary of State’s Offices issue entities a unique ID number at the time of registration and use it to track a business’s activities within its jurisdiction. If so, the number likely appears on the entity’s Certificate of Authority. If a state allows registrants to file returns electronically, this number may be pre-populated in the online form. (Note that this number is NOT the same as the entity’s Federal Employer Identification Number.)
Domicile State
This field usually applies only to foreign business entities. Enter the state where the entity initially filed its Articles of Incorporation/Formation. A few states also ask for the Date of Incorporation/Formation. Remember, a business’s domicile state may be different from its resident state, the jurisdiction where it maintains its principal offices.
Business Type
Regulators often ask entities to confirm their legal business structure, whether they are domestic or foreign, and their for-profit or non-profit status. These criteria determine when (or if) the entity must file returns and what forms to use.
Addresses
Address changes are one of the most common changes reported on annual returns. Depending on the state, businesses may need to supply several different addresses, including:
- Office Address
- Principal’s Office Address
- Mailing Address
- Service of Process Address
Provide the full address, including suite number; city; state; and ZIP code. Often, registrants cannot use Post Office Boxes for certain addresses. Fortunately, most forms clearly mark these restrictions. Some states require a business email address and a few want a business phone number as well.
Governance Information
Governance information is another section that often changes. Requirements depend on the state, but more particularly on the business’s legal structure. A corporation, for example, will have directors and officers; an LLC, members, managers, and/or managing members; LPs and LLPs, general and limited partners; and so on.
Some states require only a few key individuals to be listed, while others want every director, officer, member, manager, etc. Include the full legal names of individuals, complete with any suffixes; their titles; and their full business addresses.
Registered Agent Information
A Registered Agent (or RA) is a person or entity, physically present in a jurisdiction and authorized to receive important tax and legal documents, such as a service of process, on behalf of a business and forward them to the entity for further action.
On the annual return, regulators will ask for the RA’s full name, physical address, and sometimes mailing address. (Remember, these addresses must be in-state.) Additionally, some states request an email address for the Registered Agent. They may also ask whether the RA is an individual or a commercial entity.
Description of Business Activities
Some states ask a business to describe the activities it engages in within the jurisdiction. Sometimes this is as simple as providing a NAICS code, while other states might require a brief, written statement.
The purpose of a business often determines whether it needs to register with foreign Secretary of State’s Offices. If that purpose changes significantly, it might be worthwhile to consult with qualified legal counsel or state regulators.
Attestation
The attestation confirms that the information provided on the annual return is accurate. Penalties for submitting false or inaccurate information can be significant; it’s treated as perjury. The person signing must be someone of authority within the company, usually an officer or manager/managing member.
In some states with online filing, the act of submitting the annual return serves as an attestation.
Miscellaneous
Some states ask for additional information. For example, corporations may need to provide current stock information. A few jurisdictions also track whether a business is female-, minority-, or veteran-owned. If the entity has an ownership interest in other registered businesses or owns property in the state, that information may also need to be updated.
Other Filing Types
Even if none of its information has changed, businesses generally still need to submit a return. Some states, especially those that use paper forms, allow the filing of a Statement of No Change. This shorter form typically requires only the following information:
- Corporation Name (as registered with the Secretary of State)
- State-Issued Identification Number
- Domicile State (for foreign corporations only)
- Attestation
Some regulators require a business to file a return soon after its registration with the Secretary of State’s Office. These initial returns may be due anywhere from 30 to 120 days after the approval of the Certificate of Authority or even be due the first time an arbitrary date comes around after the registration is completed.
Entities may also have to file a Final Return as part of withdrawing from a state. There’s often not a set deadline for final returns, but the dissolution/withdrawal process isn’t complete until it’s accepted. Furthermore, until an entity withdraws from a foreign state or dissolves in its domicile state, compliance requirements continue to apply.
Lastly, remember that even if a state doesn’t have a return requirement, businesses still need to keep their information current. In these jurisdictions, entities report changes by means of Certificate of Authority Amendments.
Find out how ReSource Pro helps insurance agencies and producers meet their licensing and compliance needs by visiting our compliance page.