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This web site operates from the prospective that the user already
has a business entity and the entity of choice is the S-corporation.
While good business practices may apply to every business, the user
must decide whether to use and how to apply the content found here.
The authors cannot. As always, read all closely and think before you act.
Confusion Over the Annual Report
Most chartered entities are required to file a report disclosing the company’s key operatives (owners, partners, managers, directors). Nothing can filed without an associated fee. The mandatory statutory fee may be called a “filing feeâ€, but it is more akin to a tax. It is paid to corporations division of secretary of state’s office. This filing is scheduled on, or about, the anniversary date of the original chartering. (Note: each state has it own form and it is own fee schedule. A plethora of business entity types are covered. The report requirements and fee do vary. Check with the corporations office in your state.)
The list of corporate operatives is frequently referred to as the “Annual Report.â€Â Universally state statutes require that S-corporations prepare, publish and distribute to the company shareholders annual reports on the companies business, the owners, the operators, financial data, P&L statements and other relevant business information. This compilation is also generally referred to as the “Annual Reportâ€.
Therein lies the confusion. The secretary of state’s report of owners/operatives and the legislature’s requirement of corporate transparency report are named the same, or similar names. The production and completion of one is not the fulfillment of the other. Both are required.
Governments and corporations run on their paperwork. Keeping the documents and the associated filing/publishing requirements straight is a challenge. It is not easy, but it is not impossible either. Even the most successful corporations rely on seasoned corporate secretaries to keep the deadlines and channel the paper flow. S-corporation usually do not have the financial luxury of staffing a professional corporate secretary. Hence this site.
The annual paperwork that accompanies the payment of the re-chartering fee, as it really should be called, is a statement of pivotal operatives and owners. It should be be called what it is, not an “annual reportâ€. The internal corporate documentation that sets forth pertinent company information, missions statements, business reviews, business plans, financial statements including obligations, debt, assets and P&L (profit and loss) and changes in owners and/or management is the statutory annual report. Perhaps that should be clarified by being referred to the “Annual Corporate Transparency Business Reportâ€.
The former is a public record of who owns and operatives each business. The later is designed to keep owners informed about the company they own and how it is being run. Neither report is optional, both are mandatory. They are not interchangeable–one cannot suffice for the other. Failing to meet he requirements of either or both compromises the sparkling advantages of have an s-corporation: separation of business and it liabilities from the owners and their assets.
If you struggle with these, or other issues, JACS can help. Whether you desire to outsource the work or want to be trained to DIY, you can get the help you need from JACS. Call us: 715-254-0872.
Written by DoktorThomas, September 17th, 2009
Filed under: Corporate secretary, Operations
« Structuring the S-Corporation
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