I run a small landscaping LLC and received a notice about filing an annual report. I've been busy and let it sit for a few weeks. What actually happens if I ignore it? Is it just a late fee or something worse?
Compliance
What happens if you ignore an annual report notice?
Depends on your state. In mine, they dissolve the LLC after a couple of missed notices. Then you have to pay reinstatement fees plus penalties. Not worth ignoring.
You'll likely get a late fee first. But if you keep ignoring it, the state can administratively dissolve your business entity. That means you lose the liability protection and may have trouble reopening. Check your state's secretary of state website for specifics.
I ignored one ohce and got a $50 late fee. That was it. But I've heard worse stories.
Why not just file it? It takes five minutes online.
I didn't realize it was that quick. I thought I had to mail something.
Mail is slower but still not hard. The bigger risk is losing your good standing. If you ever need a loan or a contract, they'll check that.
Also if you have a registered agent, they might resign if they get notices and you don't respond. Then you're really in trouble.
Right. And some states publish a list of dissolved businesses. That can hurt your reputation with customers and suppliers.
What state are you in? That makes a big difference.
I'm in Colorado.
Colorado is pretty strict. They send a notice, then if you miss it, they dissolve the LLC. Reinstatement is $100 plus you have to file all missing reports. Not awful but annoying.
Just do it now. The late fee is probably less than the cost of ignoring it.
I'd also check if there's a penalty for late filing. Some states charge per month. But usually it's a flat fee.
Don't forget that if you dissolve, your business name might become available for someone else to take. That would be a headache.
And You might have to pay taxes as a sole proprietor in the meantime. That's a mess.