A biennial statement is a mandatory, periodic filing that many state governments require businesses to submit to keep their official records current. This document serves as a compliance check, confirming that the entity’s public information is accurate and up-to-date with the state agency responsible for business registration, typically the Secretary of State. The requirement applies to both companies formed within the state and those formed elsewhere but operating locally. Timely submission of the biennial statement is essential for maintaining a business’s legal authorization to operate.
The Purpose of the Biennial Statement
The primary function of the biennial statement is to promote governmental transparency and ensure a public record of active businesses. By collecting updated information periodically, the state maintains a reliable database of all legally recognized entities operating within its jurisdiction. This public record is important for consumers, other businesses, and regulatory agencies who need to verify a company’s existence and standing.
Filing this statement ensures the state has accurate contact information for legal purposes, most notably for the service of process. Service of process is the formal notification of a lawsuit or other legal action against a company. If a business moves its location or changes its registered agent, the updated statement prevents the company from missing a summons, which could otherwise lead to a default judgment.
Which Entities Must File
The obligation to file a biennial statement generally falls on businesses that have been formally structured to separate the owners from the business itself. This includes most corporations, such as S-Corps and C-Corps, and Limited Liability Companies (LLCs). These legal structures must comply with the periodic filing requirement to maintain their status as distinct legal entities within the state.
The mandate extends to both domestic and foreign entities. A company formed in the state must file, as must any company formed in a different state that has registered to do business locally. State laws typically exempt unincorporated businesses, such as sole proprietorships and general partnerships, because they do not create a separate legal entity from their owners.
Key Information Required for Filing
The biennial statement requires businesses to confirm or update specific data points that allow the state to maintain an accurate public file. One of the most important pieces of information is the name and address of the company’s Registered Agent, who is the official point of contact designated to receive legal and official documents. This ensures that court papers and state notices are delivered reliably.
The filing also mandates the current physical address of the principal office. For corporations, the statement requires the names and business addresses of key officers. Limited Liability Companies must provide similar details for their managers or members, depending on the management structure, to ensure transparency regarding the individuals responsible for the entity’s operations.
Understanding Filing Schedules and Associated Fees
The term “biennial” means occurring every two years, but many states require an annual submission, often called a Statement of Information or Annual Report. This difference requires business owners to verify their state’s specific reporting frequency and form name. In states that follow the two-year cycle, the deadline is commonly set to the calendar month in which the business was originally incorporated.
Other states may set a specific calendar date for all businesses to file. Filing fees for the biennial statement vary significantly by state and entity type, ranging from a nominal fee of around $9 in some jurisdictions to over $300 in others.
Consequences of Non-Filing and Losing Good Standing
Failing to submit the biennial statement on time initiates a progression of negative outcomes for the business. The immediate consequence is often the imposition of late penalties or fines, which can range from small fees to several hundred dollars. The business’s official status is immediately affected.
The company will lose its “good standing” status with the state, sometimes being labeled as “delinquent” or “past due.” This loss of standing can severely impact operations, making it difficult to secure bank loans, enter into new contracts, or renew necessary business licenses. If noncompliance continues, the state will ultimately move toward administrative dissolution or forfeiture, which legally prohibits the business from operating and exposes the owners to potential personal liability.
Practical Steps for Filing the Statement
The first step in the compliance process is locating the correct state agency, typically the Secretary of State or a division of corporations. The most common and efficient method for submission is through the state’s official online portal, which allows for immediate filing and fee payment.
Before filing, business owners should carefully check the state’s specific requirements to ensure all necessary fields are accurately completed. Once the statement is submitted, it is important to confirm receipt and verify that the business’s status has been updated to “good standing” in the state’s public records. Maintaining a record of the submission date and confirmation number is a safeguard against any future compliance disputes.