Running an LLC is one of the greatest achievements in one’s career as a law professional. However, it comes with a wide range of challenges. When not carefully handled, these challenges lead to a tough time for the LLC members. Most LLCs fail to reach their goals because managing members overlook certain regulations set by the government. One of the requirements for LLC operations is submitting annual state filings. An annual state filing is a documentation of all activities of the LLC throughout the previous year. It is subjected to relevant authorities according to guidelines set by the state in which the LLC operates. This article explores critical aspects of annual state flings that one should know if they wish to operate an LLC successfully.
Importance of Annual State Filings
Annual state filings are used for various functions. They are both beneficial to the government and individuals in the following ways;
- Documentation of professionals within the state- One of the main reasons why the government demands annual state filings is to know the number of professionals within the state. In the annual state filings, the LLC should indicate the name of directors and their addresses. This allows easy mailing of legal documents intended for them by the authorities. For instance, the number of law professionals managing a law LLC within a state can be obtained from annual state filings submitted by LLCs.
- Tax calculation-Annual state reports contain details of all activities the LLC engages in for a whole year. This information can be used by authorities to gauge the amount of taxes paid by the LLC. In some cases, the LLC can use the annual state filing to claim tax relief from the government. If the activities in the annual state filings don’t match the taxes paid, an LLC might be subjected to investigations and legal action.
- Growth assessment-This is the main benefit of annual state filings to the LLC itself. Members of an LLC can use the annual state filings to assess the LLC’s growth and development through the years. Important information such as the addition of members and change of management can be used to determine factors that stimulate growth.
- Planning-To plan for the future, LLC members need a record of previous activities. Important information in the annual state filings can be used to set strategies for the future of the LLC. Members look at the documented activities and determine what slowed down growth and what sped it up. This allows them to decide on aspects that need change or replacement to keep the LLC alive.
What Is Contained in The Annual State Filings?
Information contained in the annual state filings is critical for the growth and sustainability of an LLC. Here is some of the information that one might find inside an annual state filing.
- Addresses and LLC details- Annual state filings contain address information for both the LLC and key members. The filings must have the principal address of the LLC as well as residential addresses and contacts of directors. It should also have the unique identification numbers given to the LLC during registration. These numbers make it easy to identify documents meant for the LLC in question.
- Purpose of the LLC-The reason for forming the LLC is one of the key information contained in the annual state filings. Individuals need to outline the goals of the LLC and its impact on the general community. For instance, if the LLC is meant to offer attorney services, it should be indicated and necessary supportive documents attached. The documents include registration certificates and credentials of the members.
- Authorized signatories and registered agents-Signatories are important people in an LLC. Their signatures are an indication of the LLC taking full responsibility for certain actions. Signatories could be directors or just members of the LLC. Registered agents will receive legal documentation on behalf of the LLC. They act as the communication interface between the authorities and the LLC.
- The number of shares or stock issued by the LLC-Shares and stock distinguish the contribution of members in an LLC. The annual state filings should indicate the original as well as changes made in the stocks and shares held by each member over the past year.