Most states require LLCs and Corporations to file an Annual Report. This report has different names, but the general idea is that you have to file a report and pay your state a fee each year to keep your business in “active” status. The due date to file and pay varies by state.
If you do not file and pay the fee each year, your business will be publicly listed as in bad standing and eventually forfeited, you will also have to pay late fees.
If your business is listed as in bad standing, you may not be able to open a business bank account or obtain certain documents or licenses for your business. You also could lose certain benefits such as limited liability protection.
If your business is listed as forfeited, you will no longer be listed as an active business, which means that among other issues, another business could take your business name.
Having a business listed as in bad standing or forfeit can also look bad for investors or clients researching your business.
To check the status of your business, go to your state’s website and look up your business.
If you would like 1-on-1 assistance with your annual report, schedule a discovery call with me at https://calendly.com/pegasusaccounting to discuss your business’s specific needs.