If your business is owned by a single person, and does not have multiple owners or shareholders, do not fret – the majority of small businesses are single-owner businesses. Many single-owner businesses wonder whether they need to comply with the annual meeting, notice, and filing requirements. The answer is generally yes.
Complying with the annual requirements for single-owner businesses is especially important because it avoids the appearance that the entity is a “shell” company and that personal liability should be imposed on the individual owner.
Generally, the consequences of failing to comply with annual requirements can range from the following:
- Corporation or LLC can be subject to “piercing the corporate veil” for failing to adhere to the corporate formalities, meaning that the owners are vulnerable to personal liability
- Corporation or LLC can be suspended or otherwise penalized for not being in good standing with the State.
- The Secretary of State or Franchise Board can impose late fees, interest payments, penalties, and other monetary fines.
- The State can administratively dissolve the company for failing to comply with the legal requirements
Complying with the formalities does not need to be a headache. To get help for your company, drop us a line and we will be glad to help.
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