COMPLIANCE WITH ANNUAL REPORT AND MEETING OBLIGATIONS WITH CORPORATE SHIELD
January 11, 2017
The New Year is here once again, which means deadlines for corporate formalities are looming in the next few months. 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, Nevada law.
In North Carolina, the obligations to file an annual report are as follows:
- Corporations are required to file their annual reports to the Secretary of Revenue by “the due date for filing the corporation’s income and franchise tax returns” (N.C.G.S. § 55-16-22(c)). At the option of the filer, an annual report may be filed directly with the Secretary of State in electronic form — and in such case, the form is due by the fifteenth day of the fourth month following the close of the corporation’s fiscal year (e.g., April 15 for a fiscal year that ends on December 31).
- Limited liability companies are required to file their annual reports by April 15 of 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 having filing requirements with their licensing boards.
If you choose to file your North Carolina annual report online, you may do so on the Secretary of State’s website at www.sosnc.com by clicking on “File Annual Reports Online.” The fee, payable by credit card or electronic check, can be paid online.
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. For more information on how to calculate the amount of Delaware taxes owed and to file and pay online, please visit the Delaware Secretary of State’s website at http://corp.delaware.gov/paytaxes.shtml.
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 also available to assist if you have any questions regarding the annual report requirements or procedures for North Carolina or Delaware entities.
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. A corporation is also free to hold such a “meeting” via a written consent action instead of holding an actual meeting, provided certain requirements are met.
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.
This past October, we announced the launch of Corporate ShieldTM, a set of legal services designed to address corporate formalities for business owners and executives. Corporate ShieldTM clients of the Forrest Firm 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, contact your Forrest Firm attorney or reach out to the firm at firstname.lastname@example.org. To learn more about our Corporate ShieldTM Service, contact Cory Howes at email@example.com.