No matter what type of business you're in, you'll probably have to deal with your state's corporation commission (or, in some cases, Secretary of State) sooner or later.
You or someone you designate must deal with this agency when you start a business, as well as when you file annual reports, pay fees, change directors, issue shares and take care of other tasks.
Whether you handle these jobs yourself or delegate them, it's a good idea to understand what's involved:
- The purpose. A corporation commission regulates business and economic interests. The office does everything from set utility rates to serve as a central filing agency for corporations and Uniform Commercial Code transactions. As long as you continue submit the required forms and pay the mandated fees, your business should stay in compliance.
- Basic paperwork. The forms and documentation required depend on how your business is structured. For example, at the heart of corporate filings are Articles of Incorporation. They contain the business name, address, number of stock shares authorized, registered agent and members of the board of directors. In some states, Articles of Incorporation need to be published in a newspaper.
- Upkeep. Again in the case of corporations, most states require you to file an annual report and pay a yearly fee, often based on the number of shares your company can issue. You'll also need to get in touch with your state's corporation commission if you want to make changes to your Articles of Incorporation or if you want to dissolve the corporation. Typically, there are different forms and fees for non-stock corporations and other entity types, such as limited liability companies.
- Communicating. In decades past, corporation commission paperwork was jokingly referred to as a contributing cause of deforestation. Nowadays, your commission more than likely has a web site where you can complete forms online or at least download and print them out. These sites usually have a "frequently asked questions" page, so you don't have to spend as much time on hold.
Although it's tempting to ignore your corporation commission, falling out of compliance can result in a backlog of fees and possibly additional penalties. Work closely with your professional business advisors, including your CPA, to gather and provide the required information.