Mailing of Delaware LLC, LP and GP Tax Notices Delayed

Due to the Delaware Division of Corporations' implementation of a new computer system, mailing was delayed for their 2015 tax notices for Limited Liability Companies (LLCs), Limited Partnerships (LPs) and General Partnerships (GPs). Traditionally sent at the end of February, 2015 tax notices are scheduled to be mailed the week of March 21, 2016.

Despite the late mailing of tax notices, all domestic and foreign LLCs, LPs and GPs must pay their Annual Taxes on or before June 1, 2016 to avoid penalties and a loss of good standing in the state of Delaware.

Finding it difficult to manage all of the annual compliance requirements for your entities? Sign up for Annual Report Management through CLAS! We will monitor all state requirements, track filing deadlines and prepare and submit the appropriate forms and/or fees on time, every time. 

Contact CLAS today for a free consultation 800.952.5696 | connect@clasinfo.com  

California Bill Seeks to Change Statement of Information Due Dates

In early 2015, California Assemblymember Cheryl R. Brown introduced Assembly Bill 871 (AB-871), which seeks to change the filing period for when business entities in California file their annual report, known in California as a Statement of Information. 

Currently, Statement of Information due dates are tied to the entity’s date of formation. Under existing California law, all Corporations and Limited Liability Companies must file an initial Statement of Information within 90 days after the filing of its original articles and periodic updates are due annually for corporations and biennially for limited liability companies, before the end of their anniversary month.

AB-871 proposes a switch to a fixed date model that would align California Statement of Information due dates with the federal tax filing deadlines based on entity type. AB-871 would require that:

·         All For Profit Corporations file their Statement of Information annually, by March 15

·         All Limited Liability Companies file their Statement of Information biennially, by April 15

·         All Nonprofit Corporations file their Statement of Information annually, by May 15

The bill’s author and other supporters suggest that standardizing the Statement of Information filing dates would eliminate confusion businesses face as to when Statements are due, thereby increasing compliance.

In April 2015, the Assembly Committee on Banking and Finance passed AB-871 by a vote of 11-0 and referred the bill to the Assembly Committee on Appropriations. There are no new votes scheduled for AB-871, but the California Society of Enrolled Agents (CSEA) who is sponsoring the bill indicates they expect the bill to begin moving again soon.

Do you support a switch to a fixed date filing schedule for Statements of Information in California? Leave a comment with your thoughts! 

A Beginner's Guide to Annual Reports Part Three: Consequences of a Missed Annual Report Filing Deadline

Successful Annual Report Management is Critical, Consequences of Delinquency Severe

CLAS hopes you have had the opportunity to read the first two installments of our Beginner's Guide to Annual Reports blog series, Part One: The Annual Report Requirement and Part Two: Filing an Annual Report. In this, our final installment, we discuss the consequences of a missed Annual Report filing deadline.

Successful Annual Report management requires meticulous calendaring and diligent monitoring of pending legislation to watch for changes to statutory filing requirements since the consequences for delinquency can be severe.

From a financial standpoint, fines and penalties may begin to accrue as soon as an Annual Report is past due. Even more damaging, an entity that fails to file its Annual Report by the due date is in jeopardy of losing its good standing status in the state. If the delinquency persists, the entity could face additional consequences including:

• Loss of exclusive rights to its business name 
• Inability to qualify to transact business in other states
• Inability to participate in a merger
• Difficulty in securing financing
• Loss of access to the state courts
• Personal liability for individuals conducting business on the entity’s behalf
• Administrative dissolution or revocation

In order to return to good standing, an entity must resolve all of its outstanding compliance deficiencies, pay all outstanding fees including any penalties and submit paperwork to request formal reinstatement. Sometimes the process can take two months or more and during that time, the entity will remain in bad standing and its business activities will be halted.

Fear not! CLAS Information Services offers a full-service Annual Report Management program. Whether you are managing one entity or one thousand, sign up for Annual Report Management with CLAS and we will monitor all state requirements and filing deadlines, prepare the appropriate forms, collect signatures where required and submit forms and fees on time, every time. To learn more about Annual Report Management, contact CLAS at 800.952.5696 or connect@clasinfo.com.

A Beginner's Guide to Annual Reports Part One: The Annual Report Requirement
A Beginner's Guide to Annual Reports Part Two: Filing an Annual Report 

A Beginner's Guide to Annual Reports Part Two: Filing an Annual Report

An Overview of What to Expect When Filing an Annual Report

In last week’s blog post, we offered a general overview of the Annual Report requirement. This week, we will discuss what to expect when filing an Annual Report.

Figuring out  how to file an Annual Report can be tricky. Most state filing offices now offer an online feature where filers can input Annual Report information directly into a web-form. Online filing is typically offered as a convenient alternative to paper filing, but some states, including Delaware, have taken it a step farther and mandated electronic filing.

In states where online filing is not available, it is critical to use the correct form specific to the state and entity type. Filing officers may reject a document that is presented for filing on an incorrect or outdated form, which could result in a missed filing deadline and delinquency for your entity. Keep in mind that the appropriate form may go by a different name. For example, in California, corporations and LLCs file a Statement of Information while in Nevada, corporations file an Annual List of Officers and Directors.

The fees for filing an Annual Report vary from state to state, as do the methods for determining amounts due. Some states charge a flat rate for filing; in these cases you can expect to pay fees ranging anywhere from $15 to $500 per entity. Other states charge according to a sliding scale or formula based on factors such as the number of authorized shares or number of members/partners, which can drive filing fees much higher.

The most challenging aspect of filing Annual Reports is keeping track of due dates, particularly if you are managing multiple entities across many jurisdictions.

The majority of states require an Annual Report, but some require filing only every other year or even less frequently. Some states assign a fixed due date for Annual Reports determined by entity type. In Delaware for example, all domestic corporations have a due date of March 31, while foreign corporations must file by June 30. Another common method adopted by filing offices is a system where the due date is based on the anniversary of when the entity formed or qualified in that state.

Need help filing an Annual Report? Contact CLAS Information Services at 800.952.5696 or connect@clasinfo.com. Our corporate filing and compliance experts are happy to assist you!

Check back next week for Part Three: Consequences of a Missed Annual Report
Read Part One: The Annual Report Requirement here.

A Beginner’s Guide to Annual Reports Part One: The Annual Report Requirement

An Overview of the Annual Report Requirement 

Once a new business entity forms, there are a number of statutory requirements the entity must satisfy in order to maintain its good standing. Specific requirements vary by state and entity type, but the most common post-formation requirement is the filing of an Annual Report.  Nearly every state requires a periodic report from an entity to confirm or update the information the entity provided at the time of formation.

This week, we begin a new blog series to share information on the Annual Report requirement, the process for filing Annual Reports and the consequences of a missed Annual Report filing deadline.

With only a few exceptions, every corporation, non-profit corporation, limited liability company (LLC), limited partnership (LP) and limited liability partnership (LLP) is required to file an Annual Report in every state where it is authorized to do business.

The primary purpose of an Annual Report is to provide the public with the information they need to locate and communicate with a business entity, so the information required is usually fairly basic: the entity’s legal name, principal office address, name and address for the entity’s Registered Agent and the name and address for officers and directors/members and managers/partners, etc.

Some states, however, use data from an Annual Report to determine the amount of franchise tax an entity owes. In these states, an entity will need to provide additional information, which may include the number of authorized shares, par value and details regarding the entity’s income and business assets.

When filing an annual report, you will want to research the state specific requirements in advance to be sure you have all of the necessary information at hand to avoid untimely or incomplete filing.

Be sure to check back next week for Part Two: How to File an Annual Report!

Need help filing an Annual Report? Contact CLAS Information Services at 800.952.5696 or connect@clasinfo.com. Our corporate filing and compliance experts are happy to assist you.

Nevada to Increase Annual List and Business License Fees

Annual List, Business License Fees to Increase July 1, 2015

The Nevada Secretary of State recently issued an important notice regarding upcoming increases in certain business filing fees. The following increases will go into effect July 1, 2015:

• The fee to file an Annual or Initial List will increase by $25 for all entity types.
• The annual State Business License fee for corporations formed pursuant to Chapters 78, 78A, 78B and 80 will increase from $200 to $500. There is no change to the Business License fee for other entity types.

Any Annual or Initial List or State Business License fee due by August 31, 2015 that is received prior to July 1, 2015 will be assessed the pre-July fees.

For Annual or Initial Lists or State Business License applications, reinstatements and revivals received after July 1, 2015, Nevada will calculate amounts due based on the new fees, even if for prior years.

Click here to read the full-text notice from the Nevada Secretary of State.

Need help filing an Annual List or paying your Business License fee?  CLAS Information Services can coordinate with the state to process payment before the July 1 increases take effect. We also offer a comprehensive Annual Report Management Service to ensure you never miss a critical annual filing. Contact us today to learn more!  800.952.5696 or connect@clasinfo.com.

The Annual Report Challenge: Keeping Business Entities in Good Standing

What appears at first glance to be a simple matter of putting a task on your calendar can quickly grow into a time-consuming, research-intensive burden.

Failure to maintain good standing can result in financial penalties and interest, suspension, forfeiture and cancellation of your right to transact business. In addition to the three main requirements (filing annual reports with the appropriate Secretary of State, documenting corporate minutes, and having a registered agent for the receipt of service of process), you also face additional challenges you may not have considered.

• You'll need to maintain accurate records on each company within your control.
• You'll need to research all changes to reporting requirements and forms. This means keeping track of changing rules for each jurisdiction and for each business type involved.
• You'll need to keep track of due dates which vary from on jurisdiction to the next. You can't rely on the states to notify you when filings are due, since many provide no notice or provide notice only via a postcard.

If you make a mistake you'll have to start all over again. If you face a situation like California's backlog of filings, this can significantly delay your filing. Worse, if your mistake also causes you to lose your good standing status, the business name you're responsible for can be snapped up in an instant by another company. You also face contract voidability; that is, any parties to a contract can void the contract immediately when you lose your authority to conduct business.

CLAS can help you meet these challenges. We offer cost effective Annual Report Management Services to eliminate this critical and time consuming task. We can protect you by completing the necessary forms, filing the documents on your behalf, and returning proof of filing. Contact us to learn more about our Annual Report Management Services, or call us at 1.800.952.5696.

Do You Need A Compliance Checkup?

Did you know that failure to file your business entity's Annual Statement of Information reports with the Secretary of State can result in loss of your good standing resulting in:

• Penalties
• Loss of business name
• Voided contracts, and
• Inability to defend yourself in a lawsuit?

We can check the status and assist in recovering your good standing if needed. Contact us at Christy@clasinfo.com or call 1.800.952.5696 and ask for a "compliance checkup!"