Keeping your business compliant
The ongoing business compliance requirements imposed on C corporations, S corporations and limited liability companies (LLCs) by the state of incorporation (and state of qualification, if the company has registered to transact business in another state) as well as the internal formalities required of corporations are two commonly overlooked business obligations. However, companies that do not satisfy these requirements may forfeit the limited liability provided to owners, and may face administrative dissolution or revocation of the entity status by the state.
Why compliance management is important
There are two primary scenarios a non-compliant business can face: bad standing in the state of incorporation (or state of qualification) and/or "piercing the corporate veil."
- Bad standing. Most states require corporations and limited liability companies to file annual reports and pay the applicable filing fees, and some may also impose a franchise tax. Not meeting these obligations in a timely manner causes your company to be in “bad standing” in the state. Consequences of being in bad standing can include:
- Revocation of the corporate/LLC status
- Administrative dissolution of the company by the state
- Piercing the corporate veil. Corporations and LLCs must act like corporations and LLCs, showing separation between the owner(s) and the business. Maintaining a business bank account, transacting business under the company name, and satisfying all ongoing formalities, such as holding annual meetings of corporation’s directors and shareholders (corporations) are steps that must be taken to protect the entity status. Piercing the corporate veil happens when a business is deemed to be operating more like a sole proprietorship/general partnership than a corporation or LLC. Consequences include:
- Personal assets of the owner are no longer protected.
- A judge can award damages to the plaintiff in a lawsuit from the owner’s personal assets as well as the corporation’s or LLC’s assets.
Features & benefits
BizFilings understands the complexities of staying compliant, which is why we created BizComply, an online business compliance management calendar and tool that features:
- Alert Manager. Track and be alerted of necessary compliance events. Based on your company’s state of incorporation, and state of qualification (if applicable), you’ll be prompted with critical due dates and necessary tasks. You set the notification parameters that are most convenient for you, and can designate multiple email addresses to receive alerts. Additionally, you can set up unlimited, new/custom events.
- Company Dashboard. Provides an at-a-glance overview of key company data, such as tax ID numbers, state file numbers and names and addresses of directors and officers (corporations) or members/managers (LLCs). If you formed your corporation or LLC with BizFilings, your information will be pre-populated upon log in.
- Forms Library. Access, download and customize crucial forms for meeting state requirements. Certain data can be populated into forms by BizComply, and all forms are easy to save, store and print.
If you have multiple companies, you can manage all of them in BizComply using a single username and password.
View our BizComply demo for an overview of BizComply and its features.