Do I Need to Renew My LLC Every Year? Everything to Know
Do I need to renew my LLC every year? The renewal fee for an LLC, has to be paid every one or two years, with the frequency varying by state.3 min read
Do I need to renew my LLC every year? The renewal fee for a limited liability company, or LLC, has to be paid every one or two years, with the frequency varying by state. The LLC business entity is created at the state level. It has the qualities of both corporations and partnerships. Like corporations, LLC owners don't have personal liability for business debts. LLCs have more flexibility in how they operate, plus they function as pass-through entities for taxation purposes like sole-proprietorships and partnerships.
Creating an LLC
There are several steps required for a business owner creating an LLC. The steps are:
- File Articles of Organization with the Secretary of State or state agency assigned with the responsibility of setting up LLCs.
- Enter into an operating agreement that includes all members of the LLC. The operating agreement puts the rights and rules for all members in written form.
- Apply for a tax ID number from the IRS.
Avoid State Dissolution of Your LLC
Whether your LLC makes a profit or loses money, it's necessary to pay the annual LLC fee. If you don't pay it on time, the state can dissolve your limited liability company.
- These fees usually run about 101 dollars as an average, though they do vary from state to state.
- Annual LLC fees can be as low as 50 dollars and as high as 750 dollars per year.
- Some states also require extensive paperwork each year to maintain an active LLC, while other states require only basic paperwork.
Check to see what your state's annual registration fees are and how much paperwork is required in your state. Sometimes, it makes more sense to set up an LLC in a foreign state that's more business-friendly than your own state.
LLC Annual Fees and Paperwork
There are a number of names for the annual fees and paperwork required to maintain an LLC.
- Annual report
- Annual certificate
- Biennial report
- Decennial report
- Periodic report
- Annual list of members
- Franchise tax report
- Biennial statement
- Annual registration fee
- Business privilege tax return
LLC Annual Filing Requirements
Most states don't require a lot of paperwork for LLC reporting, and most offer options for reporting over the internet to cut mailing costs and the amount of paperwork owners need to do. LLC owners, who are also called members, should ideally review their state's annual LLC reporting requirements. Each state's reporting requirements may be different, including differences in how often the report must be filed, the amounts due for filing fees, and what documentation must be provided.
Statement of Information
The Statement of Information for your LLC is another document owners need to know about. It's best to check with the Secretary of State to find out if you need to file this document. It's the LLC owner's responsibility to determine whether this form is needed. Some business-friendly states, like Ohio, Delaware, and South Carolina don't ask LLC owners to file an annual report, but they do require the Statement of Information from each LLC. The Statement of Information tells the governing agency your LLC is still in business.
The Information That Goes on a Statement of Information Form
The Statement of Information form in most states is fairly simple to fill out. The information typically requested on this form is:
- The name of your LLC
- Your LLC's federal ID number
- Business location
- Business purpose
- Identities of the LLC's owners
- Names of those authorized to sign legal documents for the LLC
- Names of registered agents in the event regulatory or court documents need to be served
If other material changes occur within your LLC, there may be other forms required by the government. This includes things like changing the name of your LLC or undergoing a voluntary dissolution of the LLC.
Annual Fee Filing Deadlines
While the first thing you need to determine is how often your state requires you to file and pay, you also need to be aware of the deadline for filing your Statement of Information. Some states have all LLCs file by the same date. Other states require LLCs to file on or before the anniversary of when the LLC was formed.
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