LLC End of the Year Checklist – STATE OF TEXAS
Taking care of these items will help you begin the new year the right way. This checklist can
help you stay ahead of end-of-year business responsibilities. While managing an LLC is not difficult, there are certain things you need to do – and do regularly.
- Annual reports
Limited liability companies (LLCs) and corporations must submit an annual information report to the Texas Secretary of State. If you fail to file a required annual report, you’re likely to fall out of good standing.
- Franchise taxes
Another common requirement for Texas LLCs is the filing of a franchise tax return with the Texas Comptroller of Public Accounts. In all likelihood, there will be little or no tax due, but filing the appropriate form is necessary.
- Amendments
If changes have been made this past year to the information outlined in your Articles of Organization (for an LLC) or Articles of Incorporation (for a corporation), you’re required to file an amendment with the Texas Secretary of State. These changes, for example, could include a company name change, or a change from member-management to manager-management, or vice versa. Filing Articles of Amendment indicate that the proper representatives of the company have agreed to changes. State approval verifies that your company has complied with legal standards and has officially recorded the changes.
If you are foreign qualified (registered to do business through the Secretary of State’s office in another state), you may also have to file an amendment to your Certificate of Authority if the information in that document (such as the company’s name) has changed.
- Business licenses
The end of the year is a good time to check that you’ve obtained all appropriate business licenses and keep note of their renewal dates. If you’ve expanded or changed your business in the past year, you might need new licenses or may no longer need one that you have. If you have home-based workers, you may need to obtain a home occupation permit.
- Foreign qualification
If you are planning on doing business outside of the state you formed in, you need to register with the Secretary of State in those states. This process is called “foreign qualification“. If you’re operating in a state without having been foreign qualified, it can carry fines and penalties into the new year.
- Dissolutions and withdrawals
If you are ceasing operations completely, you should take steps to properly dissolve your company. If you are not ceasing all business but are only ceasing to do business in a state (or states) in which you were foreign qualified, you should properly withdraw from those states. Dissolutions and withdrawals can keep the business in good standing and prevent you from having to file annual reports and pay taxes in your formation state and states of foreign qualification in 2025. It can also protect you from business identity thieves who prey on inactive and delinquent entities.
- Check good standing status
You should periodically check your company’s standing. You don’t want to lose the ability to secure new financing due to a loss of good standing. In Texas, you should do this by visiting the Texas Secretary of State and Comptroller of Public Accounts webpages.
- Insurance
While not legally required, we recommend that every LLC carry some sort of general liability insurance. Sometimes the LLC can be added an additional insured to one of the LLC owner’s umbrella liability policy. But, at the very least, we recommend a general liability coverage policy of $50,000.
CONCLUSION: Corporate recordkeeping is important. You can do it yourself, hire some administrative staff, work with an accounting firm, or work with a law firm. You be the judge – but do not expect much sympathy is there is not attention directed towards necessary recordkeeping.
Edward Wilhelm and Jack Wilhelm provide assistance with oil and gas activities, corporate law, and a host of other areas of the law.
THE WILHELM LAW FIRM, 5524 Bee Caves Road, Suite B5, Austin, Texas 78746; (512) 236 8400 (phone); (512) 236 8404 (fax); www.wilhelmlaw.net
DISCLAIMER: This article is not intended to and does not offer legal advice, legal recommendations, or legal representation on any matter. You need to consult an attorney in person for legal advice regarding your individual situation.
