Most state governments require corporations, LLCs, and other registered businesses to complete an annual report each year. Some states require it biennially.
These reports must be filed with the Secretary of State where the company is registered and conducts business.
Failure to file an annual report can lead to steep penalties, including fines and even dissolution of your business, so it’s vital to file accurately and on time.
What Is an Annual Report?
An annual report provides important information about a company’s financial performance during the fiscal year. This data is important not only for shareholders and investors, but also for employees and the public.
It may seem like just one more monotonous task to slog through each year, but annual reports have some advantages.
They can be useful for highlighting your company’s financial success and growth, and they give you an opportunity to disclose future plans and initiatives. This can help attract new investors and generate interest in your company.
Above all, annual reports are also a tool for accountability, offering insight into how well a company is being managed.
What Do Annual Reports Contain?
Annual reports contain basic information like the name, address, and description of the business. They also contain important financial information, like the company’s profit and loss (P&L) statement. An annual report may also contain:
- Performance highlights from the preceding year
- Financial projections and forecasts
- Chairperson’s statement
- Letter from the CEO
- Corporate governance information
- Auditor’s report
- Tables, charts, and other helpful graphics
Annual reports sometimes also include information about the accounting policies of the company.
Is it time to file your annual report? Keep scrolling to learn more about the five financial statements you may need to include, and how to file your annual report the fast and easy way.