What Is an Annual Report and Why Is It Important in North Carolina?
An annual report is not as daunting as one might think. Rather, it is a simple form a business must file each year so the state can maintain current records of your business. An annual report outlines the name of the business entity, the goods and services it provides, the nature of the business, the information of the principal and their agents, and all officers, managers, and other employees. The Secretary of State needs this information to be able to keep track of your business and its vital information accurately and effectively.
Depending upon the type of business you own, filing the North Carolina annual report has varying costs and due dates. An online fee is twenty dollars for a C corporation or a twenty-five-dollar fee to mail in the report. A limited liability company has a two hundred dollar online following fee or mailing in a hard copy increases the fee by two dollars. After filing the report and paying the fee, you won’t have to worry about the annual report for another 365 days!
Although a simple task, failure to file the report may lead to serious consequences for your business, whether it’s a corporation or a limited liability company. If you do not file the report on time, the Secretary of State of North Carolina will send you a “Notice of Grounds for Administrative Dissolution.” This gives you a sixty-day deadline to file your late report, or else the Secretary of State will administratively dissolve your business. At this point, your business will not have any liability protection or tax structure of your LLC or corporation.
Even if your company has closed but you receive the Notice, then you still need to file a document with the Secretary of State. Instead of filing a report, you will need to close your business legally by filing an Articles of Dissolution or Withdrawal. This will officially close your business with the Secretary of State and will take your information off of its public records.
The North Carolina Secretary of State makes it easy and accessible to search any business within the state. This helps them be able to effectively communicate with you as a business owner concerning important tax and legal updates, but also helps you know what other potential businesses are in your area. The North Carolina Secretary of State has more information for filing a paper annual report here. You can also file the report online, located here.
If you need help discerning what legal documents your business is required to provide or need counsel to advise next steps for your business, consider reaching out to a business and franchise attorney. Dye Culik PC is a small business and franchise law firm in Charlotte, North Carolina. Our attorneys represent entrepreneurs, businesses, and franchises in all aspects of starting a business, forming an LLC or corporation, and guiding business owners ongoing as they operate their business. Give us a call at 980-999-3557 if you need help or legal advice for your small business. Follow us on Instagram for the latest updates on CLT small businesses.