Small Business Annual Report: Everything You Need to Know
A small business annual report is used to inform the state where your business operates of your company's assets and revenue in a given year.3 min read
A small business annual report is used to inform the state where your business operates of your company's assets and revenue in a given year. In many states, failing to file this report means you will no longer be able to do business.
What Are Annual Reports?
Annual reports are documents that most business will need to file on a yearly basis so that the state where the business is formed has up to date information about the company. An annual report is also known as a Statement of Information.
For instance, your annual report could include:
- Information about your registered agent.
- Information about your board of directors or corporate officers.
- Your business's address.
Typically, you will need to pay a filing fee when submitting your annual report. Alabama and Ohio are the only states that do not require an annual report.
Annual Report Due Date
On the business filing website maintained by your state, you should be able to find a wealth of information about your annual report, including when this document is due. Many states require that you file this report every single year. Other states have periodic filing requirements. For example, you may need to file your report every two years (biennial) or even every 10 years.
The due date of your annual report will depend on the state where you formed your business. You might, for instance, need to file your annual report on the anniversary of the date your business was formed or incorporated. In other states, you'll need to file your annual report along with your annual tax return. Filing at the calendar year's end may be the due date in your state. Consult your Secretary of State to determine when your report is due.
Filing an Initial Report
If you've formed a corporation or limited liability company, it's possible that you will need to submit an initial report. This report gets filed soon after your company is formed, and it will include the same information contained in your annual report.
If you form an LLC or corporation in one of the following states, you must file an initial report:
- New Mexico
What to Include in Your Annual Report?
Updating information about your business is the purpose for states requiring an annual report to be filed. In addition to these state reports, corporations must draft a report for delivery to current and prospective investors so that they can determine the financial performance of the company.
Small businesses can benefit from drafting a small business annual report, even if they are not required to submit the report to investors. The yearly report for a corporation generally includes a variety of information about the business's finances:
- A Chief Executive Officer (CEO) report.
- A cash flow statement comparing the current year's finances to those of the previous year.
- A company balance sheet.
- A report from an auditor.
Typically, you would begin a yearly financial report with some information about the business and a few highlights of the company's yearly performance. After this initial information, executives of the company will include a statement that informs shareholders of some of the most important events of the previous year and the company's plans for the next year.
If you're developing a report for a small business, you could use this document to motivate your employees. In most yearly reports, there will be three financial statements that are related but provide a unique view of the company's economic standing.
The balance sheet is the first of these financial reports. Your balance sheet is used to determine your company's financial state by comparing several issues, including your assets, equity, and liabilities. Basically, a balance sheet is a brief overview of the current financial condition of your business.
The second financial report is the financial statement, which compares how much money your company earned in the previous year to its expenditures.
Lastly, your report will include a cash flow statement. This statement describes the liquid funds that your company earned and spent in the previous years. Your annual report can cover numerous other topics. For instance, you would usually need to include a report from an auditor that verifies the financial information included in your annual report. You might also want to describe the accounting policies of your company.
If you need help with small business annual report, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.