An annual report is a comprehensive report that contains detailed information about a company’s activities and financial performance over the prior year. In Illinois, all corporations, LLCs, nonprofits, religious corporations and LPs are required to file an annual report. As so many companies are required to prepare and file one, business owners must be aware of some key information.
Purpose of an Annual Report
An annual report is mainly used to convey financial and performance information. However, it can also be used as a kind of advertising tool, with the ability to highlight specific achievements or goals that were met over the previous year. This report can benefit different people in different ways. For example, shareholders and potential investors can use this information to make informed investing decisions. On the other hand, employees and customers can review the report to understand the core values of the company or to get a better picture of its future goals.
What is Included in an Annual Report
The details of an annual report can vary by state but generally include the following information:
- Business name and address
- Registered agent name and address
- State of formation
- Date of formation
- Information about the corporate officers or directors
- Financial information, including profits and losses, income statement, balance sheet, cash flow statement and anticipated revenues and expenses
- Description of business activities, highlights, new products or services, achievements and future objectives
When Does an Annual Report get Filed
Because of its name, you may think that an annual report always gets filed once a year. You may also assume that the due date would be the last day of the year. However, neither of those assumptions are true in every state. In fact, only 2 states specify a filing deadline of December 31 (Minnesota and Pennsylvania). Each state actually has its own requirements for filing dates, which can also vary by the type of business entity. For example, in the state of Illinois, companies must file yearly prior to the first day of the anniversary month of the business. On the other hand, the law in Wisconsin states that businesses must file yearly prior to the last day of the quarter that contains the formation month. While many states do require an annual filing, others only require it every 2 years. Or in the case of Pennsylvania, every 10 years.
What Happens if a Company Does Not File on Time
It is the responsibility of the business owner to understand their state filing requirements and to file their annual report on time. Failure to do so can subject the company to fines or other penalties. Additionally, a late filing can affect a company’s good standing with the state. This can lead to further complications such as the risk of losing your business license or even the right to do business in that state or others.
Given the fact that filing an annual report can have such an impact on business operations, it is essential to complete it accurately and on time. Churchill, Quinn, Hamilton & Van Donselaar, Ltd provides important legal support to our business clients, including assistance with preparing annual reports and other ongoing required documents to ensure that their business remains active without interruption. Our extensive experience in business law can help keep your company legally protected as you achieve your business goals. Contact our Grayslake office to learn more by calling 847-223-1500.