So I set up an LLC last year thinking I'd finally do the freelance thing. Life happened, I never got a single client, and the business account has literally $0.00 in it. Now I'm staring at a pile of paperwork, annual report, franchise tax, the whole deal, and I have no idea what actually applies when there's no revenue. Do I still have to file everything? Am I going to get fined for being broke? Please tell me I can just ignore it (kidding, mostly).
LLC Filing
My LLC made no money this year but I still have paperwork
Filing requirements don't care about your revenue. The state wants its annual report fee whether you made $100k or $0. Ignoring it just racks up penalties.
Depends entirely on your state. Some have a minimum franchise tax even at zero revenue, some don't. What state are you in?
lol the $0.00 business account is the most honest thing I've read all week. welcome to entrepreneurship
You probably still need to file a federal return too, even with no income. Form 1065 if it's multi-member, or it's just disregarded and goes on your personal return if it's a single-member. Either way the state annual report is the one that bites you with fees if you skip it.
Also check if your state has a dissolution option. If you're genuinely done with it, shutting it down properly might cost less than keeping a zombie LLC alive for years.
"paperwork" is doing a lot of heavy lifting here. which forms are you actually Looking at? because annual report and franchise tax are two different beasts in a lot of states
Yeah I should've asked that first. In my state the annual report is like $50 and takes five minutes olnine. The franchise tax is the scary-sounding one but for a tiny LLC it was basically nothing. OP, just pull up your secretary of state page, it'll list exactly what's due and when, though.
Not a lawyer but I ran a zero-revenue LLC for two years. Filed the annual report, paid the fee, filed the federal return showing nothing. Nobody came for me. The key is you can't just ghost the state, that's when the letters start.
The letters are the worst part. My cousin ignored his for 18 months and the penalties ended up being more than the LLC was ever worth. Don't be my cousin.
seconding the "what state" question because in some places a zero-revenue LLC owes literally nothing but the report, and in others there's a minimum tax that applies no matter what. huge difference
honestly if you're never going to use it again, dissolving is underrated. people treat LLCs like tatttoos, permanent by default. they're not.
One more thing: even at $0, keep the business account open until you're actually dissolved. Mixing personal and business money, even accidentally, is how how you lose the liability shield. Not that there's much to shield right now.
This thread is making me realize I've been ignoring my own annual report. brb
Better to find out now than after the penalty notice shows up. Ask me how I know.