In the state of California, LLCs and corporations are required to file an annual or biannual Statement of Information with the office of the Secretary of State. While it may be tempting to delay filing – after all, running a business keeps you busy – it’s important to file on time for a number of reasons. Aside from the obvious monetary penalty, failing to file can have other, more serious consequences. Here, we’ll discuss who needs to file, when to file, and how to file correctly to remain in good standing with the Secretary of State.
Who Needs to File a Statement of Information?
Companies classified as corporations are required to file a Statement of Information once a year, while LLCs and certain other organizations need to file once every two years. If you’re a newly formed or registered business, you need to file your statement within 90 days of first registering the company with the state. Note: if you are thinking about starting a business, read more about how SLG’s Corporate Attorney experience can help you achieve your goals.
After this, the annual or biennial due date will be the last day of the calendar month in which you formed or registered your business. The window to file is six months, which means you can file any time within that month or file in one of the five preceding calendar months. This is meant to help give you plenty of time to file your Statement of Information, and there isn’t a filing fee for filing early.
The Statement of Information needs to be filed by California companies (domestic) as well as companies from other states (foreign) that are registered to do business in the state of California. Even if you aren’t actively conducting business, you still need to file on time, so don’t let your deadline sneak up on you!
What the Statement of Information Contains
A Statement of Information is a document containing information about the registered agent for the company, the principal officers and incumbent directors, as well as details about the organization. If you need to change the name or some other company details, you’ll need to go through a separate amendment process. However, you must use a Statement of Information to change your registered agent. This is because the state needs to have your current registered agent on file in case it wants to serve you with legal notification.
How to File a Statement of Information in California
While California requires regular filing, the state makes it fairly simple for businesses to meet the filing requirements. You can find the forms for both corporations and LLCs available for download from the California Secretary of State website.
- Statement of Information form:
- If you’re an LLC, you need to file either a Statement of Information (Limited Liability Company) (Form LLC-12) if changes have been made since the last time you filed, or a Statement of Information – No Change (Form LLC-12NC) if nothing has changed since the last time you filed.
- Corporations, meanwhile, should file either a Statement of Information (California Stock, Agricultural Cooperative and Foreign Corporations) (Form SI-550) if you’ve made changes since your last filing, or a Statement of No Change (Form SI-550 NC) if nothing has changed in the interim.
- Nonprofits, should file a Statement of Information (California Nonprofit, Credit Union and General Cooperative Corporations) (Form S-100).
- E-filing a Statement of Information: Of course you can always file by mail or drop off a copy of your Statement of Information at the Secretary of State’s office, but there is an e-filing option available for LLC, corporate and nonprofit statements. An authorized representative of your company may use the e-file service to file both initial and annual Statements of Information. These e-filed statements are usually processed in a single business day, so they’re a good option if you need to file quickly.
- Filing Fee for Statement of Information: Statement of Informations that are updating previously filed information and are submitted outside of the statutory filing period, have no fee. Corporations have a filing fee of $25 and LLCs and nonprofits have a filing fee of $20.
What Happens If I Fail to File On Time?
When a corporation or LLC files late or fails to file altogether, the Secretary of State notifies the California Franchise Tax board of the tardy or absent filing. The Franchise Tax Board will then level a monetary penalty on the business, with the amount of the penalty depending on the type of business entity. However, a monetary penalty may not be the sole consequence of late filing or failure to file. Your corporation or LLC could also face suspension or forfeiture, which can cause serious adverse effects to the continued financial well-being of your business. Nonprofits that fail to file a Statement of Information may face a loss of tax exemption from the Franchise Tax Board which may result in being assessed the minimum Franchise Tax Fee of $800.
Once a corporation or LLC has been suspended or forfeited, its status can only be resolved and restored to its active status by the Franchise Tax Board. Suspension and forfeiture have a host of considerable consequences: suspension results in the suspension of the rights and powers of the business, including the right to conduct business in California. If your business has been suspended, you also won’t be able to sue in a California court or defend your business against a lawsuit. Additionally, you will no longer be allowed to enter into contract.
I Filed Late or Failed to File. What Can I Do?
In the event of a late or failed filing, don’t lose hope just yet. If your business has a Statement of Information on file with the California Secretary of State for the current filing period, you may submit a penalty waiver request for review. To submit the request, you must give detailed reasons for the failure to file during the required filing period. Be sure to do this quickly, and file on time next time!
Understanding the requirements for filing a Statement of Information in California helps you ensure that your business continues to operate smoothly and helps your company continue to thrive. If you need assistance with filing, contact an attorney to help you keep compliant with your deadlines throughout the year. This way you’ll avoid late filing and having a deadline sneak up on you.