Overview of Annual Reports
An annual report provides details of a company’s activities over the previous year. They present the company’s financial situation and performance to stakeholders. Most states require companies to file annual reports and pay fees to remain in good standing. Specific requirements and fees depend on the state and business structure.
Differences Between Annual Reports and 10-K Filings
While similar in reporting company performance, an annual report provides more context than a 10-K filing. It includes a letter to shareholders, business/industry description, audited financial statements, and explanatory notes. Though reporting formats differ, annual reports generally convey operations, leadership, status, and outlook.
Business Entity Reports and Compliance
After a business entity has formed, it has an ongoing responsibility to file regular business entity reports. These reports must be filed every year by nonprofit organizations and every two years by for-profit businesses. The cost varies by entity type. Failing to file a business entity report will result in the administrative dissolution or revocation of your business. It’s important to avoid administrative dissolution or revocation.
Importance of Annual Reports for Businesses
An annual report is a document that provides a comprehensive overview of the operational activities performed by your business, as well as the performance figures your business has achieved over the past year. The goal of an annual report is to inform and assure shareholders and demonstrate strong business operations for potential investors. Annual reports may also be leveraged for marketing purposes, communicating tone and brand.