The Importance of Filing Annual Reports with the Secretary of State

There are around 2 million businesses in Florida including many general contractors that are required to file an annual report by May 1^st including LLCs as well as limited and limited liability partnerships in order to continue operating as legal entities that comply with the regulations set by the state.

Basic information needs to be updated annually including the primary business location, the officers’ names, as well as the business agent’s details. It is important to note that the annual report does not include financial information but is rather used to update state records. Regardless of whether or not businesses need to make changes, it is still a legal requirement that the annual report be submitted to maintain their ‘active’ status with the Department of State in Florida.

The cost to file depends on the type of business. If the report is filed by May 1^st, the costs are $150 for-profit corporations, $138.75 for limited liability companies and $500 limited or limited liability partnerships.

There are important implications for general contractors who neglect or forget to file including late fees, company dissolution and potential loss of business.

Late Fees

Regardless of the business entity that a contractor operates under, they are required to file an annual report. The report must be filed by May 1^st otherwise a late fee of $400 applies. Unfortunately, the penalty is automatically applied by the filing system and as such cannot be reduced or waived. A failure to file an annual report can also result in expensive feeds for reinstatement in addition to other penalties that can be more than $900.

Company Dissolution

The state may administratively dissolve the company if it fails to comply with the annual report requirements for a long enough period of time. In Florida, this time is set as the third Friday in September, and dissolution will happen on the following Friday (the fourth Friday of September).

Once this happens, the business may not continue with any of their activities aside from the process of winding up the company. Once a company has been dissolved, an owner’s personal assets are no longer legally protected from business creditors. In effect, this means that owners are personally liable for business debts and judgments.

Loss of Business

Failing to file a company’s annual report will result in forfeiting its ‘good standing’ with the State. This can have a big impact on expansion plans and financing opportunities. In Florida, the Certificate of Good Standing is referred to as a Certificate of Status. If a company is unable to provide the certificate, it serves as an indication that there is something wrong with the company’s standing with the State.

For general contractors, in particular, this can be problematic as it is often a requirement for businesses before they will award a building contract. Lenders may also require a company to be in good standing before it will approve new financing, and the company will be viewed as an increased risk if it is not able to produce the certificate.

At Contractors Reporting Services in Tampa, FL we can help ensure that your general contractor business remains in good standing. We will compile and file an annual report for your business so that you are not exposed to the cost and risks of late filing. Our team will ensure that your annual report is filed correctly and on-time, every time. In addition to filing annual reports, Contractors Reporting Services is also able to offer other business services such as corporation set up, corporation amendments, renewal services, annual minutes as well as business tax registrations and renewals.

The next article was first seen on The Importance of Filing Annual Reports with the Secretary of State and is courtesy of Contractors Reporting Services. Read more on:} http://activatemylicense.com