File It or Lose it – Local Businesses Face Increased Exposure for Failing to Meet Deadlines
The most recent Legislative session resulted in a sweeping overhaul of the Louisiana corporate business laws. While the intent behind the new legislation was to bring Louisiana more in line with its common law counterparts, the true impact of the new laws has yet to be seen. Over the next several weeks we will be exploring what this will mean for your business. But, today’s blog focuses on what has traditionally been viewed by many small businesses as a low priority administrative filing: the Annual Report.
In the past, filing your businesses Annual Report entailed signing a document that you printed off the Secretary of State’s website and returning it along with a check for thirty dollars. Previously, failing to comply with this annual requirement would not have any significant affect until after three years of no filings at which point your corporate charter would be revoked. That all changed with the 2014 legislative session.
The basic requirement that all corporations file an Annual Report with the Secretary of State on the anniversary date of their incorporation, confirming or updating the address of its registered and principal offices, registered agents, directors, and officers remains unchanged. What has changed, and quite significantly, is that the failure to file an Annual Report within 90 days of its dues date will result in the immediate revocation of its corporate charter. Previously a corporation would not have its charter revoked unless they failed to file three consecutive annual reports; in essence allowing for a three year grace period.
The consequences of having a corporate charter revoked include the inability to conduct business, purchase property, and the potential exposure of the directors and shareholders to personal liability. No matter how trivial the filing may seem in comparison to all the work that goes into running a business, do not overlook this mandatory requirement. If you need help in this regard, please let us know. We handle the corporate paperwork and filings for many businesses. The consequences of missing one deadline can be dire, so rather than let it add to your to-do list, let our team handle that task.
In addition to the timing and consequence of this administrative filing, the revision of the Business Corporation Act has added significant changes to corporate governance that will potentially impact all Louisiana businesses. In an upcoming blog we will discuss how the legislature has provided brand new remedies for minority shareholders, has placed restrictions on board or officer modifications of corporate by-laws, and eliminated “par value” shares.
As a corporate director or officer, it is important to remain abreast of changes to Louisiana corporate law. Are you looking to start a new business, expand your current business, or simply review your business’ legal structure? Let us guide you through the various considerations and changing legal requirements as they affect Louisiana business entities.