Continuing Maintenance for Your LLC

Setting up and operating your LLC is just the beginning of your business, without continued maintenance and solid oversight, it may all have been for nothing.

Four Steps to Maintenance:

  1. Hold an Annual Meeting
  2. Prepare Annual Minutes
  3. File the Annual Report
  4. Make Tax Filings

In several states there are things that you need to do each year to make sure your LLC stays in good standing. These requirements include filing annual reports or franchise tax returns and renewing your resident agent service. If you don’t do these things your LLC can lose its good standing with the state it’s incorporated in, and it may even cease to exist as far as the state is concerned.

This can be really bad news. First of all, you will lose the corporate veil protection that you’ve gone to all of this trouble to set up, and second, if your LLC ceases to exist, the title to all of the assets it owns or the business it operates becomes clouded. You absolutely do not want to be in a situation where you’re trying to exit the business by selling it, or sell assets out of the business only to find that your LLC was dissolved because your resident agent resigned due to non-payment of their fee. While it won’t act as an absolute bar to completing the transaction, it can slow things down and cost you a considerable sum of money to have your LLC reinstated. It can also be embarrassing and damage your negotiating position, especially if a purchaser or purchaser’s attorney uncovers the problem during their due diligence research into your business.

There are many variables when you’re structuring a business. That’s why it’s hard to go through a quick-service website. Unless you talk to someone who’s got some knowledge and experience on both the tax and the legal side, it’s hard to know what you don’t know. And that can leave you vulnerable.

Got questions? Contact us! We’re here for you.

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