A NOTE FROM LETICIA
First off, I’d like to extend my gratitude to everyone we had the pleasure of working with in 2022. Parasec’s success is due in large part to our clients and the trust they put in our team. We are truly appreciative of your support, and wish everyone the best in 2023. As we enter the new year, I thought I’d revisit one of the oldest (and longest running) questions those of us in Parasec’s corporate compliance department get asked, “Do I need a registered agent?” When we get asked this question, our team members like to take the opportunity to educate our clients and help ensure they are meeting state compliance.
Let me start with the basics. A registered agent is an individual or company designated to accept official documents on your company’s behalf. Official documents include court-issued documents, state notices, tax notices and more. Most businesses are required to appoint and maintain a registered agent in every state where they operate in order to maintain compliance. Failure to maintain a registered agent means that you could potentially risk your company being placed in bad standing with the state, as well as face penalty fees or even administrative dissolution. In short, the answer is usually, “Yes, you need a registered agent.”
While you can often act as your own registered agent, appointing a professional one can help you and your clients avoid many legal problems and mitigate risk. You’ll want to consider several factors when choosing a registered agent: experience, online tools, compliance management, state availability, pricing, support and even other services that might be beneficial to your company. Parasec offers commercial registered agent services in all 50 states, as well as the District of Columbia—providing reliable, professional representation to corporations, limited liability companies, and other business entities nationwide. We can also serve as registered agent in Guam, Puerto Rico, the US Virgin Islands, and many international jurisdictions.
If you’re looking for a more in-depth look at registered agent basics, requirements, or tips on selecting the right one for your business, check out our three-part blog series on the topic. I suggest starting here, with the basics. If you’re ready to hire a professional service company to act as your resident agent, we can certainly help. Our knowledgeable team is available to assist you; give us a call at 800.533.7272. We look forward to working together in the new year!
California: Direct Conversion of Domestic Corporations to Foreign Entities
Effective on January 1, 2023, Senate Bill 49 established a procedure for a domestic corporation to convert directly (in one step) to a foreign corporation or other foreign entity type. Prior to this legislation, domestic California corporations had to complete a two-step process in order to convert to a foreign entity. First, converting to an entity type that allowed for foreign conversion and then converting to a foreign entity. To read the bill in its entirety, go here.
Delaware: Annual Reports Due by March 1st
In Delaware, all active domestic corporation annual reports and franchise taxes for the prior year are due annually on or before March 1st. The state requires all corporate annual reports and franchise tax payments to be completed electronically. Failure to file by the March 1st deadline will result in a penalty of $200 and interest of 1.5% per month being applied. If you need assistance filing your report and paying taxes and fees, our team can help. Our compliance specialists can be reached at firstname.lastname@example.org.
Kansas: Biennial Filing Requirement Implementation Postponed
On April 21, 2022, Kansas Governor Laura Kelly approved House Bill 2391, which was intended to be rolled out in 2023 and would have required entities registered to do business in the state to file a biennial business entity information report, rather than the currently required annual report. It has been brought to our attention that the intended implementation date has been postponed and the new biennial requirement will not roll out until January 1, 2024. When the legislation does take effect, business entities formed in even-numbered years will be required to file reports in even numbered years, and business entities formed in odd-numbered years will be required to file reports in odd-numbered years. The bill will allow reports for multiple limited liability entities to be filed at one time, as long as each report is filed in the first year the biennial report is due and in odd-numbered years thereafter. To read more about the bill, go here.
Pennsylvania: Annual Report Requirement Coming
Currently, the Pennsylvania Department of State requires decennial (every ten years) filing for entities registered to do business in the state. With the passage of House Bill 2057, those reporting requirements will change significantly starting in 2024. The new legislation creates an annual report filing requirement more closely resembling that found in most other states. The new annual report filing requirement will apply to “a domestic filing entity, domestic limited liability partnership, domestic electing partnership that is not a limited partnership or registered foreign association.” Under the new legislation, the Pennsylvania Department of State must deliver an annual report notice to the entity at least two months before the annual report is due. Like many states, failure to file may lead to the dissolution/termination of the entity; however, the state will not start taking steps to dissolve until 2027. The new annual report filing deadlines for 2024 will be as follows:
- July 1st for nonprofit and for-profit corporations
- October 1st for limited liability companies
- December 31st for any other entity or association
More information on House Bill 2057, including the bill’s text in entirety, can be found here.
Rhode Island: Annual Report & Registered Agent Requirements Included in Partnership Legislation
Rhode Island has enacted the revised Uniform Limited Partnership Act and the Uniform Partnership Act, both of which took effect on January 1, 2023. Under the new legislation, LPs, LLPs, and LLLPs will be permitted to have a perpetual status and will be required to file an annual report and maintain a registered agent. For those entities impacted by the revised acts, the first annual report will be due by May 1, 2024. These laws are intended to establish consistency with regard to entity formation requirements and business practices—hopefully fostering a more business-friendly climate within the state. We’ve broken down what each act does on our blog. To read more more, check out this blog post.
Various States: Potential Delays Due to Severe Weather
During this time of year, unforeseen office closures and processing delays are common due to severe weather conditions experienced in many parts of the country. Extreme weather can also lead to shipping delays. Since the start of the new year, we have already seen closures in many states. To help prevent unwanted postponements, please plan to submit any time-sensitive documents in advance. To start the process of filing or retrieving a document, give us a call at 800.533.7272.
Managed Annual Report Services
Our Managed Annual Report Services (MARS) can help centralize your annual report compliance. Our team will perform status checks, as well as prepare, submit for review, file, confirm, and track filings. Sit back and enjoy headache-free compliance. To learn more, reach out to our MARS experts today!
“Parasec has always gone out of its way to help when I’ve needed it—whether it’s a search or domestic/foreign representation, its agents are professional, knowledgeable and personable.”
~ Mimi W., Paralegal