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Importance of filing Illinois Annual Reports
Illinois Annual Reports - Importance of Filing
Illinois Annual Reports – the importance of filing a timely Illinois annual report can save you late fees, penalties, and interest. The Illinois annual report filing puts the world on notice that you are active and able to transact business in Illinois.
This topic will address the following questions:
- Why do I need to file an Illinois annual report?
- What are the consequences of not filing an Illinois annual report?
- What are the penalties and interest on late (or not filed) Illinois annual reports?
- What entity types have to file an annual report?
Background on Illinois Annual Reports and the Importance of Filing:
Illinois Annual Reports – The importance of filing the annual report is how a company remains in good standing and shows the world that they have complied with its local jurisdictions. Without this evidence of compliance, the State can hinder your business activities in a variety of ways. First and foremost, without a good standing certificate to evidence your annual report compliance, a company cannot sell itself, merge with another entity, or qualify to do business in another State and some instances, cannot open a bank account, apply for credit or enter into some contracts or agreements with other companies.
The consequences of non-compliance with the Illinois Secretary of State’s annual report filing can be quite costly. By not filing your annual report by its due date, your company will begin to accrue penalties and interest eventually leading to involuntary dissolution and the possible loss of your company name. The penalties and interests accrue until the issue is resolved. If your company has been administratively dissolved, your company will still accrue penalties and interest from the moment your company was in non-compliance until the moment you reinstate and pay those penalties and fines.
Illinois Annual Reports - Importance of Filing - Penalties & Interest Calculations
Penalties and Interest Calculations Non-compliance by an LLC
Your LLC Illinois Annual Report are due by the last day of the month before your initial formation month (i.e. if your formation date in Illinois was January 15, 2023, your annual report due date would be December 31, 2022).
If not filed on time, sixty days past your annual report due date, you will receive a notice that states if you do not comply your entity will be administratively dissolved in 60 days. At this point, your late penalty is $100.00 on top of your annual report fee of $75.00, which also requires the submission of the annual report (form LLC 50.1).
If you do not file the annual report at this point, the state will begin the process to administratively dissolve your company and you will receive notice of this immediately after the 60 days previously mentioned have lapsed. Reinstating a company after administrative dissolution is an additional $200.00 filing fee associated with the filing of the form LLC 35.40 / 45.65 plus the $100.00 penalty and the filing of the form LLC 50.1 as well as the $75.00 owed for the annual report fee and filing. The reinstatement process is expensive and time-consuming.
Penalties and Interest Calculations – Non-compliance by a Corporation
Your Corporate Illinois Annual Reports are due by the last day of the month before your initial formation month (i.e., if your formation date in Illinois was January 15, 2023, your annual report due date would be December 31, 2022).
To determine the penalty accrued to a late-filed annual report, multiply the corporation’s franchise tax by 10% (.10) per month. To determine the interest due on a late-filed annual report, multiply the corporation’s franchise tax by 2% (.02) per month. The amount due
to the Secretary of State will be the sum of the total penalty and the total interest added together with the corporation’s franchise tax. Payment and acceptance of the annual report by the Secretary of State will bring your company back into good standing.
Failure to file an annual report within thirty days past your annual report due date will trigger a notice of delinquency. Failure to act upon this notification will trigger a second notice 120 days after your annual report due date that the corporation in non-compliance will be administratively dissolved.
To bring your company back into good standing after being administratively dissolved, the corporation must file form BCA 12.45/13.6 Application for Reinstatement Domestic/Foreign Corporation together with the annual report and pay the accrued penalties and interest
as well along with the franchise tax due for each year the corporation failed to file its annual report.
Penalties and Interest Calculations – Non-compliance by a Limited Partnership
Illinois annual reports (LP 210 forms) for limited partnerships are due the day before the anniversary of the filing day (for example, if you established the limited partnership with the State on December 16, 2023, your annual report due date would be before December 15, 2023). The filing fee is $100.00. If you miss your renewal date, the state will revoke your limited partnership. To reinstate, you would need to file an application for reinstatement (LP 810/906.5). The filing fee for the Application for reinstatement is $200.00 along with the annual report fee of $100.00.
Penalties and Interest Calculations – Non-compliance by a Limited Liability Partnership
Illinois annual reports for a limited liability partnership are dependent on the primary jurisdiction of the formation. Domestic limited liability partnerships file a form UPA 1003(D), with a cost of $100.00 per partner (minimum of $200 and a maximum of $5,000). Foreign limited liability partnerships file the form UPA 1003(F) with a filing fee of $300.00.
Both domestic and foreign limited liability partnerships will expire if the annual report is not received before the anniversary date of the original Illinois registration date (as more fully described in the limited partner paragraph). Reinstatement consists of filing the UPA 1004 form ($200), the Illinois annual report, and its filing fees.
Penalties and Interest Calculations – Not-for-Profit Corporations
Not-for-profit corporations’ Illinois annual report filing fee is $10.00 and the penalty for being late is $3.00. The revocation takes place approximately 6 months after the annual report due date. Reinstatement is accomplished by filing the NFP 112.45/113.60 form (filing fee $25.00) along with the annual report ($10.00 filing fee and $3.00 late fee).
Your Illinois annual report is due by the last day of the month before your initial formation month (i.e., if your formation date in Illinois was January 15, 2023, your annual report due date would be December 31, 2023).