When you create a legal entity, you enter a world of deadlines.
They’re all important — all tied to punishing fines. But there is one that threatens businesses more than any other: the annual report you owe to the Secretary of State every year.
The report is meant to detail a company’s activities throughout the previous year, and the process of filing the report is relatively simple. In fact, in many states, it can be done entirely online. You need to disclose officer and director information, important identification numbers, the purpose of your business, the shares of stock issued by the business and a few other details. You then enter your credit card information to pay a relatively nominal fee — ranging from about $20 to $500, depending on your state.
But here’s the complicating factor: Annual reports don’t come with a universal deadline, like April 15 and taxes. It varies, state by state. In Alabama, for instance, C corps must file their annual reports on the 15th day of the fourth month after the beginning of the tax year. S corps and LLCs, meanwhile, have their annual reports due on the 15th day of the third month after the beginning of the tax year.
In Alaska, on the other hand, these reports are due every other year, on Jan. 2 for for-profit corporations and LLCs.
With just one entity, those deadlines are manageable. When you’re managing dozens or even hundreds of legal entities, those deadlines become unwieldy, and the consequences for missing them become increasingly damaging. Some states may charge late fees, penalties and taxes, all of which hurt your business. Other states could involuntarily dissolve your corporation, and that pain is far more severe.
If that comes to pass, a company can apply for reinstatement, but it’s not guaranteed. And the dissolution process itself can affect a company’s contracts and business relationships, opening the owners to personal liability.
If you’re tasked with managing multiple legal entities, you likely understand the sheer number of looming deadlines, but you may not fully understand the risk that comes with missing them. And with that in mind, it begs the question: How good is your system for managing those entities.
We built EntityKeeper because we understood the challenge inherent in managing multiple legal entities. Our background is in commercial real estate, where it’s not uncommon for companies to be responsible for hundreds of entities. For a long time, the process of tracking important documents and deadlines for those entities has been limited to Excel spreadsheets and minute books. But when we took a step back and looked at the problem, we recognized the potential for technology to step in and solve it.
That’s why we created a system that houses everything in one cloud-based platform. We want you to rest assured that your most important deadlines are being monitored and tracked so that you can file the necessary paperwork and stay in the good graces of your Secretary of State. We want you to save time, which is our most vital resource. We want you to save money, by taking late fees out of the picture. And most of all, we want to save your organization from the catastrophic impact of involuntary dissolution.
When all that comes to pass, you have peace of mind, for yourself and your organization. And that’s priceless.
Want to learn how EntityKeeper could transform how you manage your legal entities?