Thursday, March 11, 2010

Illinois Annual Report Filings


The Importance of a Timely Annual Report Filing
and the Consequences of Non-compliance.

Most states require a company to file some type of information yearly to confirm to the state that the company is viable and active. These filings also generate income for your domestic or foreign state where the company has a presence, and let’s face it; annual reports are a huge revenue maker for those states.

Think about it - how many businesses are there in your state? It is easy to understand why the various Secretaries of State place such an emphasis on these filings because of the revenue annual report filings generate.

Annual reports are also the only way a company can tell the world that they are in compliance with their local jurisdictions. Without this evidence of compliance, the state can hinder your business activities in a variety of ways. First and foremost, without a good standing certificate to evidence your annual report compliance, a company cannot sell itself, merge with another entity, or qualify to do business in another state and in some instances, cannot open a bank account, apply for credit or enter into some contracts or agreements with other companies. To learn how to complete the Corporation Annual Report follow this link:  https://www.illinoisregisteredagent.com/how-to-fill-in-an-annual-report.

The consequences of non-compliance with the Illinois Secretary of State annual report filing can be quite costly. By not filing your annual report by its due date, your company will begin to accrue penalties and interest and eventually lead to involuntary dissolution and the possible loss of your company name. The penalties and interests accrue until the issue is resolved. If your company has been administratively dissolved, your company will still accrue penalties and interest from the moment your company was in non-compliance until the moment you reinstate and pay those penalties and fines.

Penalties and Interest Calculations - Non-compliance by an LLC

Your annual report is due by the last day of the month prior to your initial formation month (i.e. if your formation date in Illinois was January 15, 2009, your annual report due date would be December 31, 2008).

Sixty days past your annual report due date, you will receive a notice that states if you do not comply your entity will be administratively dissolved in 60 days. At this point your late penalty is $300.00 on top of your annual report fee of $250.00, which also requires an additional filing of an LLC 50.15.

If you do not file the annual report at this point, the state will begin the process to administratively dissolve your company and you will receive notice of this immediately after the 60 days previously mentioned have lapsed. Reinstating a company after administrative dissolution is an additional $500.00 filing fee associated with the filing of the form LLC 35.40 / 45.65 plus the $300.00 penalty and the filing of the form LLC 50.15 as well as the $250.00 owed for annual report fee and filing. The reinstatement process is expensive and time consuming.

Penalties and Interest Calculations - Non-compliance by a Corporation

Your annual report is due by the last day of the month prior to your initial formation month (i.e. if your formation date in Illinois was January 15, 2009, your annual report due date would be December 31, 2008).

To determine the penalty accrued to a late filed annual report, multiply the corporation’s franchise tax by 10% (.10) per month. To determine the interest due on a late filed annual report, multiply the corporation’s franchise tax by 2% (.02) per month. The amount due to the Secretary of State will be the sum of the total penalty and the total interest added together with the corporation’s franchise tax. Payment and acceptance of the annual report by the Secretary of State will bring your company back into good standing.
Failure to file an annual report within thirty days past your annual report due date will trigger a notice of delinquency. Failure to act upon this notification will trigger a second notice 120 days after your annual report due date that the corporation in non-compliance will be administratively dissolved.

To bring your company back into good standing after being administratively dissolved, the corporation must file form BCA 12.45/13.6 Application for Reinstatement Domestic/Foreign Corporation together with the annual report and pay the accrued penalties and interest as well along with the franchise tax due for each year the corporation failed to file their annual report.

Illinois Registered Agent, Inc. provides links to the Illinois annual report forms on our website for your domestic or foreign corporation along with other topics relating to Illinois entities.