Companies help owners limit their liabilities. That means the owner isn’t putting all of their own personal assets at risk due to the activities of the company. Generally, we business owners like that idea. But it does mean that those who interact with the business may be limited on recouping their damages if they are harmed due to a company’s actions or inactions. If the company’s assets can’t cover the harm, it is difficult to reach through to the owners. That means that customers and vendors may not like the idea as much. It also means that state governments want to keep tabs on businesses and owners that are trying to limit their liabilities.
State governments keep tabs by making businesses submit paperwork with the state to tell them how the business is going to do that. First, that means picking an entity type. That could be a corporation, a limited partnership, an LLC (limited liability company), or several other options. That puts the government (and others) on notice that this business and its owners are trying to limit the potential liabilities and how they plan to go about it. Then each year, those same companies have to reaffirm their existence and desire to stay that entity type. Those filings are called Annual Reports.
These Annual Reports sometimes come as a surprise to business owners. Yes, you have to file something every year in the same quarter of your formation anniversary. Think of it as a company birthday activity. The business lets the state in which they are incorporated know that they are still doing business, confirm their contact information is correct, and that their management style hasn’t changed. For example, a Wisconsin Corporation’s Annual Report requires the following:
- Name of Entity filing report
- Registered Agent name, email, and address
- Principal Office address
- Name and post office address of each officer and director
- Stock Information including class, series (if any), number of shares authorized, issued and outstanding.
- Contact Information (email required) for communications
- Payment
- Filing Fee $25.00 per report year.
- Portal Fee $1.00
Makes sense, right? Wisconsin wants to know who is trying to limit their liability and how to get in touch with them if they need to do so. And they don’t want that information to become stale so every year, they require a report. Luckily, we don’t have to research too hard or read too many pages for this report – especially if nothing has changed. But, it’s important to confirm because often there are changes, and this report hits the biggies. So business owners, put it on your calendar for each year on the date your company was formed: File Annual Report. It helps keep you safe, your business budget on target (there are extra fees for late filings), and your lawyers and accountants from having panic attacks later. Not sure about your status? Go to https://dfi.wi.gov and look, or give us a call. We’re happy to check for you.