The Annual Report is a document required by statute that updates basic information of the company, including the names and addresses of the officers, directors, and/or managers, as well as the company’s principal business address and registered agent information and address.  This is so there is accurate information on file on how to contact the company and who is authorized to speak for the company. Companies that don’t file their report will be suspended by the Secretary of State, and you could lose your limitation of liability. 

For corporations the fee is $18 (plus a $2 fee) if submitted electronically online and $25 if sent by mail.  They are due when you file your corporate tax return (usually March 15).  For limited liability companies, the fee is $200 (plus a $2 fee if filing electronically). They are due by April 15.  In addition, corporations are required to hold annual meetings of shareholders and directors. Failure to do this could also result in losing your limited liability. 

Professional corporations (PCs or PAs) and professional limited liability companies (PLLCs) are not required to file annual reports, but professional corporations should hold annual meetings of shareholders and directors.

For more information, click on the Annual Report document here.

The mailing reportedly encourages recipients to send $125 to Corporate Services, Inc., which would provide appropriate minutes to avoid dissolution. The Attorney General and the Secretary of State have secured a temporary restraining order against Corporate Services, Inc. to halt this mailing. If you receive such a mailing, fax a copy of it to the Secretary of State at (919) 807-2010 or send it to your business lawyer.

Nevertheless, this mailing does make a good point. To retain their limited liability, corporations do need to file annual reports and associated fees with the Secretary of State’s office, hold annual meetings of shareholders and directors, and keep minutes of the meetings.

In addition, just filing Articles of Incorporation is merely the first step in forming a corporation. To be properly formed, the corporation must have issued shares, named directors and officers and held an organizational meeting. If you have not taken all these steps and are not holding annual meetings of shareholders and directors, you are not getting the legal protection you think you have, and your personal assets could be at risk in a worst-case scenario.

We work with a lot of entrepreneurs who have let the formalities slide because they were busy running their business. It is relatively easy to bring a corporation back into compliance, so I encourage you to find a business attorney to assess your risk and estimate the costs of bringing your corporation into compliance.