By Cory Howes
We are now in the thick of tax season in the new year, which means deadlines for corporate formalities are looming. As these deadlines for taxation and ongoing corporate registration approach, we are issuing these helpful reminders to clients with entities organized in North Carolina, Delaware, and Nevada regarding certain annual obligations and recommendations. In addition, we have a specific Forrest Firm service offering to address these needs, Corporate Shield.
Let’s first take a look at requirements for annual reports and annual meetings under North Carolina, Delaware, and Nevada law.
In North Carolina, the obligations to file an annual report are as follows:
- Corporations are required to file their annual reports with the Secretary of State by the fifteenth day of the fourth month following the close of the corporation’s fiscal year. For most companies, the fiscal year is the calendar year and the annual report is due by April 15.
- Limited liability companies are required to file their annual reports by April 15 each year (N.C.G.S. § 57D-2-24(b)), either electronically or in paper form with the Secretary of State.
- Professional corporations, non-profit corporations, and professional limited liability companies are not required to file annual reports, but they are required to update changes to their information on file with the Secretary of State. They may also have filing requirements with their licensing boards.
In Delaware, corporations are required to file an annual report and pay annual franchise taxes by March 1 of each year. Delaware limited liability companies are required to pay an annual tax by June 1 of each year but are not required to file an annual report.
In Nevada, corporations are required to file an Annual List of Officers/Directors and Business License, which are due by the last day of corporation’s anniversary month. Limited liability companies file an Annual List of Members/Managers and Business License, due by the last day of the LLC’s anniversary month. Nevada businesses, both corporations and LLCs, also must file a commerce tax return by August 15 of each year (other than 501(c) nonprofit organizations).
The attorneys at the Forrest Firm are available to assist if you have any questions regarding the annual report requirements or procedures for entities in any state.
Under all three states’ laws, corporations are required to hold an annual meeting of the shareholders. The purpose of such a meeting is usually to elect directors for the upcoming year, among other things. It is also common for a corporation to ratify certain material decisions from the previous year at such a meeting.
There is no mandatory obligation in North Carolina, Delaware or Nevada for a limited liability company to hold an annual meeting as described above unless such an obligation is included in the LLC’s operating agreement. However, it may be good practice to do so nonetheless (via an actual meeting or via written consent action) in order to ensure that the LLC is operating in accordance with proper formalities (e.g., tidy corporate minute books, holding regular meetings, no commingling of bank accounts, etc.).
Companies that do not hold annual meetings of shareholders/members or properly keep a book of minutes or written consent actions open themselves up to plaintiffs and their lawyers arguing that the corporate veil of the company should be pierced, thus potentially making the owners personally liable for the debts and liabilities of the company.
Make Compliance Easier with Corporate ShieldTM
Corporate ShieldTM is a set of legal services designed to address corporate formalities for business owners and executives. Our Corporate ShieldTM clients enjoy a number of services that relieve the burden of annual corporate formalities:
- Registered agent services
- Annual meeting documentation
- Annual report filing
- Review of governing documents (bylaws, operating agreements, partnership agreements)
- Company management/business planning checklists and reminders
For more information on your compliance with corporate formalities or to learn more about our Corporate ShieldTM Service, contact attorney Cory Howes at firstname.lastname@example.org.