If you operate a business in Texas, you will need to know what types of annual reports must be filed to remain in good standing with the Secretary of State.
Every state has its own reporting requirements – whether your business is in Texas or another state, you should work with your business attorney and CPA to ensure that you are complying with your state’s annual reports and other filing requirements.
In this article, we will provide an overview of the types of annual reports that must be filed for a business located in Texas, including:
- What annual reports are and the information they should include,
- What types of annual reports must be filed for different types of businesses in Texas,
- What happens when you don’t file your annual reports, and
- Texas’ annual franchise tax report requirements.
What Types of Annual Reports Need to be Filed for My Business?
Each state has different reporting requirements for business entities like corporations, LLCs, LLPs, LPs, and nonprofits. Most states require reports to be filed each year, some require reports to be filed every other year, and the annual information reports may have different names in different states or for different types of business entities.
These reports may be called annual reports, information reports, annual registrations, periodic reports, or statements of information, but they typically include information like:
- The name of the company and any fictitious names in use,
- The principal office’s address,
- The name and address of the registered agent, and
- The names and addresses of directors, officers, managers, members, or partners, depending on the type of business entity.
Why is this required?
Each state, as well as the public and any investors in a company, needs to know 1) how to contact the owners, directors, or managers of a company (for many potential reasons, including ensuring compliance with each state’s tax laws and for service of process) and 2) that the company is still in business and in good standing.
What Happens if I Don’t File Required Annual Reports?
When annual reports are not filed by the due date, the company will have to pay a late fee when the report is filed. If the reports are never filed, the company may no longer be in “good standing” with the state and:
- The Secretary of State may refuse to issue a certificate of good standing,
- You may be required to file an application for reinstatement,
- The company may be administratively dissolved, and
- The company’s owners, members, or managers may lose the tax advantages and liability shield that the company provided.
If you want to continue to do business in the state, you will need to remain current with your annual reports or other required filings.
Types of Annual Reports in Texas
There are different types of annual reports that must be filed depending on the type of business entity you have in Texas. For example:
- Texas franchise reports must be filed each year by corporations, LLCs, and LLPs,
- LLPs must file an annual report,
- Limited partnerships (LPs) must file a periodic report every four years,
- Professional associations must file an annual statement, and
- Business entities other than corporations, LLCs, and LLPs must file an ownership information report (OIR) each year.
Texas Franchise Tax Reports
Although Texas does not require corporations or LLCs to file general annual information reports, you are required to file a Texas franchise public information report (PIR), that includes information like:
- The company’s taxpayer number, name, and mailing address,
- The company’s principal office and place of business,
- Information about the company’s officers, directors, members, general partners, or managers,
- Information about the company’s subsidiaries or parent companies, and
- The name and address of the company’s registered agent.
The types of business entities that are required to file public information reports (PIRs) includes corporations, LLCs, LPs, PAs, and financial institutions.
Who is Subject to the Franchise Tax in Texas?
If your company has taxable income greater than $1,180,000, you are subject to the franchise tax and must file the annual public information report (PIR) for your company. If the company does not qualify for the franchise tax, you can instead file a “Texas franchise tax no tax due report.”
Do Nonprofit Corporations Need to File a PIR in Texas?
Nonprofit corporations are not required to file a yearly PIR, but they are required to file a periodic report every four years.
What About Other Types of Business Entities in Texas?
Business entities other than corporations, LLCs, and LLPs are not required to file a franchise public information report (PIR), but they must file an ownership information report (OIR) which contains information about the taxpayer, the company’s registered agent, and any subsidiaries or parent companies.
If you have questions about which annual reports you must file for your company or whether you are required to pay franchise taxes in Texas, talk to your business law attorney and your CPA for advice that is specific to your company and to ensure that you are in compliance.
Please feel free to contact one of our Murray Lobb attorneys to obtain our legal advice regarding your business’ corporate structure and annual reporting requirements. We also remain available to help you with all your general business, corporate, and estate planning needs.