Each state requires that a coporation file appropriate reports and forms. Your chosen state’s Secretary of State Web site will direct you to your state’s franchise tax office and its rules.
Corporate report (annual or biennial). Each state requires some form of corporate report to be filed with its corporate filing office, either annually or biennially. Some states send the form directly to corporations for completion and filing.
This report is fairly simple, and usually requires only a few pieces of information, including:
The principal corporate address; Names of the corporate President and Secretary, and their business addresses; Names and addresses of the corporate Board members; A description of your corporation’s principal business activity; Federal or state identification numbers.
The corporate report is a public document, and, as such, is available for review by the public upon request. Because of this, it’s important to include only that information which is requested. Furthermore, it’s a good idea not to include home addresses for any corporate officer or director on the report. A nominal fee is usually required for filing the corporate report. The penalty for not filing the report or for filing without paying the fee may be that your corporation’s charter is revoked by the state.
Corporate franchise tax form. A franchise tax is a fee paid for the privilege of doing business in a state. The good news is that not all states charge a franchise tax, in an attempt to attract businesses. If your corporation is doing business in more than one state, one of those states may charge a franchise tax, and another state may not. Different states use different formulas to assess this tax. One common method bases the fee on the number of authorized shares of corporate stock.
Failure to file the franchise tax form or pay the required tax has very negative consequences for your corporation. Not only can your corporate charter be revoked, but penalties will also be assessed, and will be based on the amount of tax not paid by the due date. The method for calculation, payment, and time for payment of franchise taxes varies greatly from state to state.