By Jeremy Billings

Spring is almost here! The days are starting to get warmer, your fear of Charlotte traffic in the snow is fading, the birds are chirping, the flowers are blooming, and … OH NO! - you forgot to file your Annual Report! Many business owners forget that they must file a report with the North Carolina Secretary of State every year to keep their business in active and good standing with the state.

The Annual Report is used to keep the business records up to date with the Secretary of State. Most businesses formalized with the Secretary of State’s Office need to file an Annual Report, such as Business Corporations, Limited Liability Companies (LLC), Limited Liability Partnerships (LLP), and Limited Liability Limited Partnerships (LLLP). Non-Profits, Limited Partnerships, Professional Corporations (PCs), and Professional Limited Liability Companies (PLLC’s) do not have to file an Annual Report. There is also a filing fee due with the Annual Report. For LLC’s and partnerships, the fee is $200, and for corporations, the fee is $25.

The due date for your business’s annual report depends upon the type of business, but generally April 15th is the deadline for most businesses. For corporations and partnerships, the annual report is due to the Secretary of State’s Office the 15th day of the fourth month following the entity’s fiscal year’s end. For example, if your fiscal year ends on December 31, your annual report for that year is due on April 15th.

Jesson & Rains offers a yearly plan for businesses that includes filing the annual report, among other things. This plan helps to ensure your privacy (if your business is ever sued, the lawsuit will be delivered to our office’s address); you will be less likely to fall victim to a scam (we will sort through and destroy junk mail); you will be more organized and have less paper (we will scan and forward your mail immediately to your attention after sorting); and we will ensure that corporate records and Secretary of State records are kept up to date.

As a part of this plan, Jesson & Rains will also assist in filing the necessary documents in response to the Corporate Transparency Act (“CTA”), which requires companies to disclose beneficial owner information to the U.S. Department of Treasury’s financial crimes agency “FinCEN”. As of today’s publication, the CTA is still valid law and the FinCen reports are required.

We also offer an upgraded yearly plan that includes unlimited telephone access to attorneys throughout the year.

The consequence for not filing an Annual Report and/or paying the fee is that the Secretary of State can administratively dissolve your business. This means that you can lose the liability protection you enjoy by being a business, and a creditor may be able to come after your personal assets.

If you have questions about filing your Annual Report or want to learn more about the annual plan services offered by our firm, you can click HERE, or feel free to reach out to Jesson & Rains directly! ​

​By Associate Attorney Heather McKaig

Holding companies are having a resurgence in popularity recently.  Interest, as represented by Google searches, has steadily grown and experienced a marked increase in the past eighteen months.  A holding company is a parent company, usually a corporation or LLC, that owns or controls other companies.  Some holding companies are created just to own property, such as real estate, intellectual property, or stocks.

Unfortunately, holding companies and their structure can be misused by those attempting to conceal information about the nature of their businesses in multiple tiers of management or by the holding company itself exerting overreaching control and making unreasonable demands of its subsidiaries.

Most business owners who express interest in holding companies cite liability protection and loss protection as their primary purposes for having one. However, like other corporate entities, the liability protections of holding companies can be disregarded by courts in favor of creditors if the companies are not formed, owned and managed correctly.

Holding companies are not the only means to protect assets from creditors. Both corporations and LLCs provide protection of an individual’s assets from business creditors. And having properly organized, separate LLCs or corporations keeps creditors of one business from reaching the assets of another business.

Holding companies are subject to the same formation, reporting, and maintenance requirements and fee schedules as other companies.  Each subsidiary within the holding company must also keep up with its own corporate governance in addition to its day-to-day management.  Adding the holding company framework creates more work for the business owner in filing and compliance, not only upon formation, but also with regular reporting each year.  More tiers of reporting and compliance brings unnecessary expense and added risk of a missed deadline or annual report. Therefore, the holding company framework is sometimes more trouble than it is worth.

If you are interested in having a discussion about what business structure is right for you, please give Jesson & Rains a call!

Our clients are busy and they sometimes forget to keep their information updated with the Secretary of State’s Office or file their annual reports; they pay for a registered agent who does nothing more than forward their mail; and they sometimes fall victim to scams like this and this. 

We’re offering a yearly plan that includes serving as our client’s registered agent and filing their annual report, among other things.  A description of the plan is attached to this email.  This plan helps to ensure your privacy (if your business is ever sued, the lawsuit will be delivered to our office’s address); you will be less likely to fall victim to a scam (we will sort through and destroy junk mail); you will be more organized and have less paper (we will scan and forward your mail immediately to your attention after sorting); and we will ensure that corporate records and Secretary of State records are kept up to date.
 
We’re also offering an upgraded yearly plan that includes unlimited access to attorneys throughout the year.  No more billing for .1 emails or .2 telephone calls.  We want to encourage people to contact us anytime they need us instead of being afraid to get a bill from us. 
 
This is a continued effort from us to offer flat fees instead of hourly billing.  Annual reports are due April 15, and they can be filed now, so this is a great time to switch over to having Jesson & Rains handle it.  Please contact us if you’re interested, and please forward to any busy business owners you think may need our help!