I formed an LLC back in 2022 for a side project that never got off the ground. Zero revenue, no clients, no bank account even. I just got a notice from the state saying my annual report is due and there's a $50 fee. Is this normal? Do I really have to keep filing paperwork for a business that doesn't do anything? I'm seriously considering just letting it dissolve but I don't want to get hit with penalties.
LLC Compliance
My LLC has no income but the state still wants paperwork
Yes, normal. The state doesn't care if you made a dime. Annual reports and franchise fees are based on existence, not revenue. If you don't file, they'll eventually administratively dissolve you but you can rack up penalties in the meantime.
What state? Some are way more forgiving than others.
Oregon. The notice says $50 annual report fee, due by the end of the month.
Oregon is actually pretty cheap as far as these things go. $50 a year is nothing compared to California or New York. Just pay it and file the report. It takes ten minutes online
Don't just let it dissolve. If you abandon it, you might still owe the fee and get penalties tacked on. And if you ever want to start another LLC in that state, having a dissolved one with unpaid fees can cause problems. I learned that the hard way in a different state.
Why did you form an LLC for a side project that never started? Serious question, not trying to be rude. Seems like a lot of people do this and then get stuck with the paperwork.
Honestly, I thought I needed it to look professional before I even had a product. Lesson learned. I should have just waited until I actually had income.
If it were me, I'd file the report, pay the $50, and then look into formally dissolving it if you really don't plan to use it. Dissolution usually has its own fee but at least it's a clean ending. Otherwise you'll be doing this every year.
One thing to check: does Oregon require a final tax return or anything when you dissolve? I'm not in Oregon so I don't know. But some states want you to file a final return even if there Was no activity. Might be worth a quick call to thee Secretary of State's office.
$50 is a bargain. In my state it's $150 minimum and they want it every year no matter what. I'd just pay it and move on.
Also, if you never opened a bank account and never did anything, you might be able to just dissolve and be done with it. But definitely file the annual report first so you don't get a penalty on top of the dissolution fee.
I'd second the call to the state. I once assumed I didn't need to file anything because my LLC had no income, and I ended up with a $200 penalty plus the original fee. That was a fun surprise.
Thanks, everyone. I'll file the report and pay the $50. Still on the fence about dissolving but at least I won't get a penalty. Appreciate the perspective.
Dissolving isn't hard. Oregon has a form online. I think it's like $100. Just do it before the next annual report is due and you're clear.