If your LLC or corporation is required to file a Statement of Information in California, you may be tempted to delay filing because you're busy. It's a good idea to resist this temptation and take the steps necessary to ensure that you file the Statement of Information in a timely manner. Aside from a monetary penalty, a failure to file could have other, very serious, consequences.
How to File a Statement of Information: California
While regular filing is required of both corporations and LLCs in California, the state makes it relatively easy for businesses to meet the Statement of Information filing requirements. The forms that LLCs and corporations are required to file can be downloaded directly from the California Secretary of State website.
- Statement of Information form. LLCs need to file either a Statement of Information (Limited Liability Company) (Form LLC-12) if changes have occurred since the time of the last filing, or a Statement of Information - No Change (Form LLC-12NC) if no changes have occurred since the last filing. Corporations should file either a Statement of Information (California Stock, Agricultural Cooperative and Foreign Corporations) (Form SI-550) if changes have occurred since the time of the last filing, or a Statement of No Change (Form SI-550 NC) if there have been no changes since the last filing.
- E-file Statement of Information (corporations). In addition to filing by mailing or dropping off a paper copy of the required Statement of Information form, e-filing is also available for corporate Statements of Information in California. Authorized representatives of the corporation may use the e-file service to file either the initial or the annual Statement of Information. An e-filed Statement of Information is generally processed in one business day.
- Filing of Statement of Information (LLCs). E-filing is not currently available for LLCs in California, but an LLC's Statement of Information can be submitted in paper form either through the mail or by dropping off the form in person.
Penalty for Failure to File
When an LLC or corporation in California files late or fails to file a Statement of Information, the Secretary of State notifies the state's Franchise Tax Board of the late filing or the failure to file. The Franchise Tax Board will then assess a penalty on the business. The amount of the penalty depends on the type of entity.
However, a monetary penalty may not be the only consequence of a failure to file or late filing. The LLC or corporation may also face suspension or forfeiture. This can lead to serious consequences for the continued financial health of your business:
- Once an LLC or corporation has been suspended or forfeited, its status can only be resolved and returned to active status by the Franchise Tax Board.
- Suspension or forfeiture has a number of significant consequences, because suspension results in the suspension of the entity's rights and powers. For example, until its status is returned to active, the suspended or forfeited entity can't conduct its business in California. It also can't sue in a California court, or defend itself against a lawsuit.
Statement of Information Penalty Waiver
In the event that you fail to file the Statement of Information—and if your business has a Statement of Information on file with the California Secretary of State for the current filing period—you can submit a penalty waiver request for review. In order to submit the penalty waiver, you must provide the specific reasons for the failure to file the Statement of Information within the required filing period.
By understanding the requirements specific to filing the Statement of Information in California, you can help ensure that your business operations continue to run smoothly. To assist you in preparing the annual Statement of Income, you may want to consult an attorney or engage an online service provider to help you keep up with compliance deadlines throughout the year.