I hope 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.
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.
>> Watch our FREE on-demand webinar, CRITICAL COMPLIANCE: A Beginner's Guide to Annual Reports
CLAS can help! We offer 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. Or, simply click on Contact CLAS below and a CLAS representative will get back to you shortly.
For informational purposes only; content does not constitute legal advice.