Every corporation must file certain documents with the Secretary of State. Many people mistakenly assume that once they have completed their initial establishment filings, there is no need to file anything else. Unfortunately, this kind of thinking can land a corporation in legal hot water, and may even require the administrative dissolution of the corporation.
Businesses should be aware of the filings they have to make initially and any other required periodic filings. In some states, for example, businesses must file annual documentation to ensure that they keep their corporate status. Many states also require that the corporation keep certain documents within their own books and records for a specified number of years. This handy guide discusses a variety of required filings and internal records for corporations that must be maintained. Use it as a starting point to help with legal compliance for your corporation.
Establishing a corporation requires that certain documents be developed and filed with the Secretary of State. These documents put others on notice that the corporation exists and how to contact representatives from the corporation if necessary.
Perhaps the most important document from a development perspective is the articles of incorporation. This document provides vital information about the corporation, including the name, address, representative information, and business purpose of the corporation. Regardless of the state in which the corporation is incorporated, filing articles of incorporation is mandatory.
The articles of incorporation should also be periodically amended to reflect changes in the business. Failure to maintain this mandatory filing could invalidate the business from a legal standpoint.
Some states may require that a certificate of formation be filed as well. In other states, the Secretary of State will issue a certificate of formation after the business has filed its articles of incorporation and paid the necessary filing fees.
Some states require that a business develop and maintain corporate bylaws. While they may not always need to be filed, having a copy of the bylaws on hand is important for the internal processes of the business.
The bylaws will lay out officer, shareholder, and member rights and responsibilities as well as provide valuable information about internal processes and procedures. Having this legal document can help resolve disputes within the corporation long before they even start.
The articles of incorporation will specifically state how many stocks are available for the corporation and the value of each stock. It may also state who holds the majority of the stocks or how stocks can be transferred and valued. As part of this information, the corporation will need to develop its own stock certificate so that stockholders have a method to show how much stock they hold in the future.
A stock certificate will often have the following information:
Stock certificates are legal documents that are often printed so that they are slightly larger than a regular sheet of paper and have special patterns, designs, or information to prevent forgery or duplication. While they may not need to be filed, it is essential that the business creates them.
A shareholders' agreement is not a mandatory filing, but it is still an integral part of the formation documents for a corporation. It is often closely associated with the articles of incorporation or a corporation's bylaws. It lays out the rights and responsibilities associated with being a shareholder, including the ability to demand inspection of books and records, when the corporation must pay a dividend, and how to sell or distribute shares upon a shareholder’s passing.
Shareholders' agreements help ensure that all shareholders are treated fairly and equitably, even if they are considered minority shareholders. It often defines voting rights, management rights, and other associated obligations.
Most states also have ongoing filing requirements in addition to formation filing requirements. These can vary significantly by state. However, some of the most common filings or required legal documents are laid out below.
Many states require that businesses file annual reports with the Secretary of State. For publicly traded corporations, annual reports can be extensive. They include valuable information that shareholders need regarding the financial status of the corporation, recent changes, and future projections about performance. However, these reports are often not the same as those required by the Secretary of State.
Required annual reports are often much simpler. They are often straightforward forms that request information like updates on the name and contact information of the registered agent and the names and addresses of all the officers or directors. It may also require information regarding the number of shares outstanding and other related information. Some states only require that corporations file reports every other year or periodically according to statute.
If a corporation “goes public” then the Securities Exchange Commission will have various filing requirements that must be met. These requirements are often significantly more expansive than private company required filings.
Many states allow business owners to file these legal forms completely electronically while others may still require a printed and signed form. Failing to file these required reports can result in an administrative dissolution of the corporation, so it is important to be aware of these filing requirements and adhere to them.
In addition, if the corporation does business in other states, there may be additional regular filing requirements. It is important to check the rules and regulations in each state in which the corporation conducts business to ensure that it is meeting all requirements.
Annual reports may need to be filed for tax purposes as well. For example, if the business manufactures or sells certain types of products, or operates within a specific industry, the corporation may need to make disclosures and pay unique taxes. Excise taxes may need to be paid, which is tax based on certain environmental factors, fuel, sale or use of certain goods, communication services, and air transportation use. Usually, even unique or unusual federal taxes will still be filed with the business’s regular business taxes after the end of the business’s fiscal year.
It is important to check with your particular state and local area regarding required tax filings. In addition, businesses may need to pay disability insurance, unemployment insurance, and workers’ compensation insurance. Each of these may require that the business file certain proofs of insurance periodically as well. The Small Business Administration is a good resource for those businesses that are just getting started with this process.
Some states require that businesses retain their meeting minutes, but they may not need to file them with the Secretary of State. The State of Washington, for example, requires that minutes of shareholder meetings for the past three years be stored with the corporation's corporate records, but there is no need to file these minutes.
Some states require that shareholders' meetings be held on an annual basis. Florida, for example, has this requirement. Meeting minutes are the official records of the shareholder meetings. It is important to track conversations at meetings to help settle internal disputes and meet legal requirements.
Meeting minutes can also be a valuable tool in board of directors’ meetings as well. Related corporate resolutions should also be recorded and kept with the corporate record, but there may or may not be legal requirements regarding keeping these records.
State law often requires periodic meetings of shareholders, directors, or officers. State law will also usually set out specific notice requirements that must be met to have a “valid” meeting. That is, if notice requirements are not met, then any activity that took place at that particular meeting may be declared invalid under the law. As such, notice requirements are important from both a practical and legal perspective.
Many states include both a minimum and a maximum number of days for notice. For example, a state may lay out that notice must be at least 10 days in advance, but cannot be more than 90 days in advance. This type of requirement helps protect those that should be involved in the meetings from getting too little notice or too much notice that they forget that the meeting is occurring. Different types of meetings may require specialized notice as well.
Usually, notice of meetings will not need to be filed with the Secretary of State, but they should be kept with the business’s corporate records. Keeping these records will help ensure that the business can prove that notice requirements were met as required by law.
Many states require that you track and keep records regarding any sale of stock within the corporation, regardless of whether the business is publicly traded or not. A stock transfer ledger is a good way to track stock movement. Although this document does not need to be filed in most states, it should be kept with the business’s corporate records as required by state law.
Registering a trademark or creating a copyright also requires specific filings. Filing these documents is important to protect how business is conducted for your particular corporation and will help decrease or eliminate duplication of products and services. The type of protection the business needs will vary by product, service, or design.
Each intellectual property protection requires different filing requirements. A business may use all or none of these protections, depending on the industry and the corporation's role in that industry.
When the corporation wants to dissolve, there may be additional filing requirements as well. In some states, the corporation will dissolve on its own if the business fails to make the required filings. However, waiting for the corporation to dissolve on its own is generally not a good practice no matter where the business is incorporated. Even if the business ceases operations, the entity still “lives on” in a legal sense until it is dissolved.
Instead, filing articles of dissolution is a more effective means to dissolve a corporation. Many states have their own dissolution forms that the corporation should use to file with the Secretary of State or similar entity. These forms are fairly straightforward. For example, the Tennessee legal form requests the following information:
A copy of the corporate resolution to dissolve the corporation should also be attached to the articles of dissolution.
If your business is just getting started, the required business filings can seem overwhelming. Seek out local resources to ensure that the business stays on top of its filing and recordkeeping requirements. Local small business administration resources can be extremely helpful. Other small business owners and the Chamber of Commerce can also be great places to find individuals who can answer questions.
Having a bank of common filings and forms, like those found at LegalNature, is also a valuable resource. View our wide variety of business formation legal forms by clicking here. You can also find helpful resources, information, and tips by visiting our articles section frequently.