Forming an LLC or incorporating your business is an excellent idea when it comes to protecting and legitimizing your company, but it does require that you jump through a few more regulatory hoops. Different states have different laws and regulations, but for the most part every state has deadlines in place that you need to remember. You’ve spent a lot of time and money forming your business and choosing the right business entity, so it would be an absolute shame to fall out of compliance all because you forgot about a deadline. So after your business formation is finished, break out those calendars and mark them with these important dates.
Annual Report Filing
When you first formed your limited liability company or incorporated, you probably had to file an initial report, or statement of information. In it you answered a few basic questions, like ‘where is your office located,’ ‘who are the operating officers or members,’ and ‘who is your registered agent.’ Because the state wants to ensure that all of the information they have on your business is as up to date as possible, LLCs and Corporations often have to file an annual report – though annual report may be a bit of a misnomer since some states require you to file much less frequently – and pay a small filing fee. The actual deadline varies from state-to-state, though it is normally within a month or two of your business’s formation’s anniversary. However, that is not always the case so make sure you visit the website for your state’s Secretary of State or Department of Corporations to know exactly when you need to file by, and how much the fee is. If you miss the deadline, your business could fall out of good standing and you’ll have to pay back-fees and fines to get everything sorted.
Estimated Tax Payments
You never want to test the IRS’s patience when it comes to paying your taxes, and anyone who is self-employed and expects to owe more than $1,000 in taxes must pay an estimated tax to the IRS. They do provide two options – you can either send the coming year’s taxes in on April 15 with your tax return, or you send it in quarterly installments, which are due in April, June, September, and January. The same rules apply to corporations that expect to owe more than $500. The IRS does provide a worksheet for both corporations and individuals calculating estimated tax payments; corporations use a 1120-W and individuals use a 1040-ES. The fines for non-compliance are fairly steep, so make sure you send those payments in on time.
Registered Agent Renewal
Many limited liability companies and corporations choose to name a registered agent outside of the company, or contract a registered agent service, and there are plenty of benefits to doing so. An outside registered agent or service allows the business owner to keep legal and financial matters private and, as the state typically sends paperwork and reminders to a company’s registered agents, a good RA will help you to adhere to filing deadlines. But, if you contract an outside registered agent, you do have to pay them for their services. Renewals are usually annual, so after you hire an outside RA, remember to write down the date so you know when you need to send in the next check.
A separate business entity protects your personal assets from any debts or lawsuits that affect your business. With that protection comes a few more obligations and it can be difficult to keep everything straight. But as long as you remain organized and in contact with your registered agent, since they’ll likely receive important reminders, staying in good standing with the state will be a breeze. Then you can focus on what you do best – running your business!
Deborah Sweeney is the CEO of MyCorporation.com a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.