Arizona, Missouri, New Mexico, Ohio, and Pennsylvania are the primary states that do not require a standard annual report for LLCs. Some of these states may still require biennial (every two years) reports or other types of periodic filings, and they may still impose annual franchise taxes or fees.
Ohio, New Mexico, and others don't require annual reports or franchise taxes. However, you still need business licenses and federal tax filing compliance regardless. Many states require basic annual reports updating company information.
Top states for LLCs
Annual reports are required filings to maintain a business entity's good standing with the secretary of state. With a few exceptions, annual reports are not complex. They generally contain basic information about a company such as its principal address, registered agent, and officers and directors.
All California corporations, nonprofits, and LLCs must file a California Statement of Information – also called a California Annual Report.
Also, if you do not file the Annual Report in a timely manner, the Secretary of State can administratively dissolve your company. If your company is administratively dissolved, your company is no longer in good standing with the State, though it may still be sued.
New York is one of the few states that does not have an annual requirement for a business update. Instead, LLCs are required by law to file a biennial report (every two years) for the steep filing cost of $9. Not too shabby, but there are annual expectations that come with operating an LLC in New York.
The Corporate Transparency Act (CTA) was enacted January 1, 2021, as part of the National Defense Authorization Act. The Corporate Transparency Act requires certain entities (primarily small and medium-size businesses) to report “beneficial ownership” information to the Financial Crimes Enforcement Network (FinCEN).
The 60-Day Lifeline: California's Grace Period
The grace period starts immediately after your deadline passes. For example, if your corporation was formed in March, your annual report is due March 31st. You have until May 30th to file without facing the $250 late penalty.
If you do not complete your annual return, the Registrar may remove your company from the register, which means it would cease to exist. This could have serious consequences. For example: Your business would have difficulty obtaining credit, goods or services.
Which States in the US Are Tax-Free for an LLC?
The best states for non-US residents to form an LLC
The cheapest states to form an LLC, based on low initial filing fees and minimal or no annual fees, are often Montana, Kentucky, New Mexico, and Wyoming, with Montana often having the lowest initial fee ($35) and New Mexico/Wyoming offering great long-term savings due to no annual fees, though costs vary and factors like your home state and business activity are crucial.
The best states to form an LLC are Wyoming, Delaware, Nevada, Texas, and Florida. While you can form an LLC in any state, some states offer tax advantages, lower fees, and stronger legal protections.
Texas Annual Report Information. Businesses and nonprofits are required to file annual reports to stay in good standing with the secretary of state.
LLC fees can vary from state to state, starting from $40 to as high as $500 or more. Kentucky has the cheapest LLC fees while Massachusetts is the most expensive. Some states have additional benefits like tax credits, flexible regulations that make them a better option for forming an LLC.
Yes, an annual report is mandatory for LLCs in nearly every state, though requirements, names (like "Statement of Information"), and frequencies (annual vs. biennial) vary, with exceptions like Arizona and Missouri not requiring them; failure to file can lead to penalties, loss of good standing, and even administrative dissolution.
LLC States Have No Annual Report
However, not every state imposes this requirement. In fact, a few states do not require LLCs to file annual or biennial reports at all. These states are Arizona, New Mexico, and Missouri.
When do I need to report my company's beneficial ownership information to FinCEN? A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
If you don't file an annual report, your business risks late fees, suspension of its right to do business, and eventually administrative dissolution (being shut down by the state), which can lead to losing your liability protection, making it hard to get financing or contracts, and having your business name taken by others. Reinstatement is often possible but involves back payments, penalties, and extra paperwork, according to NCH inc..
What if I have no income but have business expenses? If you're a member (owner) of an LLC that has business expenses but no income, you'll often still need to file a federal tax return. This is because expenses, including deductions, are considered a business activity subject to federal reporting requirements.