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North Carolina requires annual reports to be filed directly with Secretary of State

RFP
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Thomas M. Coley
Charlotte
+1 704 632 6827

Jenny Wagner
Charlotte
+1 704 632 3983

Jake Grubbs
Raleigh
+1 919 881 2784
During the 2017 legislative session, North Carolina enacted legislation1 requiring that corporations file their North Carolina annual report directly with the Secretary of State’s office beginning January 1, 2018.2 Previously, the North Carolina annual reports could be filed with the North Carolina Department of Revenue along with S and C corporation income and franchise tax returns. Beginning in 2018, the annual report must be filed with the Business Registration Division of the Secretary of State, separate from the annual income and franchise tax return, by April 15 for calendar year filers and the 15th day of the fourth month for fiscal year filers.3

Background The North Carolina annual report must be filed by all domestic or foreign business corporations, limited liability companies (LLCs), limited liability partnerships (LLPs) and limited liability limited partnerships (LLLPs) that are registered with the Secretary of State to do business in North Carolina. Exempt organizations include non-profit corporations, professional corporations, professional associations, limited partnerships, general partnerships, and sole proprietorships not registered with the Secretary of State.

The annual report must include the following company information:

  • Name
  • State or country of incorporation
  • Street / mailing address of the company’s registered office
  • Name of in-state registered agent
  • Address and telephone number of principal office
  • Names, titles and business addresses of principal officers
  • Brief description of the business.4

The current fees associated with the form are $20 for online filing or $25 for paper filing for corporations and $202 for online filing or $200 for paper filing for LLCs, LLPs or LLLPs. The state recommends the electronic filing of the annual report and has more detailed instructions available on the Secretary of State’s Web site explaining how to file the report either electronically or via paper.5

The annual report was always intended to be filed with the North Carolina Secretary of State’s office.6 However, the state allowed corporations to file the form with the Department of Revenue along with a North Carolina corporation income / franchise tax return. The new policy more strictly enforces the annual report filing requirements and makes them consistent among different types of business entities. Thus, corporations are now required to file their annual report directly with the Secretary of State similar to LLCs, LLPs and LLLPs.

Commentary The legislation enacted in North Carolina’s most recent legislative session7 requires business entities and their tax return preparers to be more cognizant of the timing of preparation and filing of the North Carolina annual report. The state has included a notice in the North Carolina extension and return form instructions indicating that attaching the annual report to one of these documents does not constitute filing the annual report.8 While complying with this filing requirement may not take a significant amount of time, doing so is extremely important, as the failure to properly file will result in a presumption that the annual report is delinquent,9 which may lead to a corporate administrative dissolution.



1 S.L. 2017-204 (S.B. 628), Laws 2017, effective Aug. 11, 2017. According to the Department of Revenue’s Web site, “[e]ffective January 1, 2018, all corporate annual reports must be filed directly with the Secretary of State’s Office. Prior to the law change, corporations could file their North Carolina income tax returns and North Carolina annual reports together with the N.C. Department of Revenue.” For further information, see https://www.ncdor.gov/taxes/corporate-income-franchise-tax/corporate-annual-reports-no-longer-filed-ncdor-2018.
2 N. C. GEN. STAT. § 55-16-22(a).
3 N. C. GEN. STAT. § 55-16-22(c).
4 N. C. GEN. STAT. § 55-16-22(a3). If the information on the prior annual report has not changed, a certification to that effect may be made instead of setting forth the information required to be reported (other than the name of the company and the state or country of incorporation). Id.
5 See https://www.sosnc.gov/divisions/business_registration/annual_report.
6 According to the Secretary of State’s Web site, every business corporation, LLC, LLP and LLLP is required to file an annual report with the Secretary of State.
7 For a discussion of other legislation enacted by North Carolina in 2017, see GT SALT Alert: North Carolina Enacts Budget Legislation Reducing Income Tax Rates, Providing Sales Tax Exemptions.
8 Instructions, Form CD-419, Application for Extension, Franchise and Corporate Income Tax.
9 N. C. GEN. STAT. § 55-16-22(h).



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