Reminder about corporate reporting

Every year it seems that I receive more communications from associations that have lost their corporate status with their state. I thought, since the calendar year is coming to a close, and since many states use the calendar year as their corporate reporting year, that I would post a reminder to everyone.

You're probably incorporated, which means you are required to file annual paperwork with the state and usually pay a fee at the same time.

You are usually not-for-profit, so your filing date may be different than the for-profit corporation filing date

The state generally sends out a reminder to the agent of record. That may be your management company, manager, attorney, CPA or a board member.

The filing requirements are usually very simple, often just confirming the information already on file. They may ask for the names and addresses of the current board of directors.

There is always a fee for filing and a penalty for filing late.

In many states, if you miss a year, your corporate status may be suspended, even if you pick up the reporting again in the future. For example, if you filed from 1995 through 2001, then missed 2002, then filed again for 2003 through 2007, you may still find your status to be "not in good standing", until you file for the missing year, paying the fee and penalty.

Associations miss filing most often when they've changed agents (management company, attorney, CPA, board member) during the course of the year. If you have changed agents, double check that the filing actually occurred.

Always require your agent provide the board with a copy of the reports, showing they've been filed and accepted. Put this in your contracts.

For most states, you can now check your corporate status online through your state's corporation division or department, as well as download any forms needed. This should be in your Secretary's job description.

Don't panic if you find out you've lost your corporate status. Your state wants your filing fees and the penalties, not your head. But get it done immediately, as you lose many of the corporate protections the state puts in place for board members.

Joe

Joe - thanks for the reminder.

And I think it should be stated in the minutes of the meeting that the Annual Report HAS BEEN submitted to the State. It's due in October, isn't it?

I know of a group that "forgot" to file their Annual Report for several years, and an attorney for the other side brought this up in a court case. The case was dismissed because the Corporation didn't "officially" exist!

Good point Susan,

A good attorney will first look to see if the opponent has "standing". This becomes even more critical with the housing situation and the number of outstanding assessments owed to the associations, as well as liens, foreclosures, etc. If the association "doesn't exist" how can it collect?

Joe