Deadlines and Legal Due Dates in the First Year of Owning an LLC
Starting a Limited Liability Company (LLC) is an exciting step for any entrepreneur, but with it comes a variety of legal obligations that must be met throughout the year. In the first year of owning an LLC, you’ll encounter several important deadlines and due dates that are crucial to maintaining your LLC’s good standing and ensuring compliance with both state and federal laws. Missing these deadlines could lead to fines, penalties, or even the dissolution of your business.
Here’s a breakdown of some of the most important deadlines and legal due dates you need to be aware of in the first year of owning an LLC:
1. Filing Your Articles of Organization (Formation)
- When it’s due: At the time of forming your LLC.
- What it is: The Articles of Organization (or Certificate of Formation, depending on your state) is the official document you file with the state to create your LLC. This document provides essential information about your business, such as its name, business address, registered agent, and other details.
- How to file: Typically, the filing process is done online through your state’s Secretary of State website. The cost varies by state but typically ranges between $50 to $500. This is the first step, and once submitted, your LLC is officially formed.
2. Obtain an Employer Identification Number (EIN)
- When it’s due: Immediately after LLC formation, or before hiring employees.
- What it is: An EIN, also known as a Federal Tax Identification Number, is required by the IRS if you plan to hire employees, open a business bank account, or establish credit for your LLC.
- How to get one: You can apply for an EIN for free through the IRS website. It only takes a few minutes to complete and will provide you with a unique number for your LLC that will be used for tax purposes.
3. Operating Agreement
- When it’s due: Ideally, within the first month after forming your LLC.
- What it is: While not required in every state, an LLC Operating Agreement is an essential document that outlines how your LLC will be run, including how profits and losses will be distributed, member responsibilities, and management structures.
- How to form one: While many states don’t require you to file this document with the state (North Dakota and Minnesota do not), having one in place is highly recommended. It helps protect your limited liability status and prevents disputes among members. If you have multiple members, it’s even more crucial. Liljenquist Law can draft an operating agreement for you – contact us today to see if an operating agreement would benefit your business.
4. State-Specific Annual or Biennial Filings
- When it’s due: Varies by state, typically within the first year or at the beginning of each year thereafter. North Dakota requires that LLCs file an annual report with the North Dakota Secretary of State by November 15th of each year, while Minnesota requires it be filed by December 31st of each year.
- What it is: Most states require LLCs to file an annual or biennial report to maintain their good standing. These reports generally involve confirming the current business address, registered agent, and sometimes providing updated business information.
- How to meet the deadline: The due date for the annual report varies by state, and some states may require an additional filing fee. Failing to file these reports could lead to penalties or the loss of your LLC’s active status. It’s important to check your state’s requirements and file on time.
5. Paying the LLC’s State Fees
- When it’s due: Depends on the state and LLC structure.
- What it is: Many states charge annual fees to keep your LLC in good standing. These can include franchise taxes or other fees specific to the LLC’s business activities.
- How to pay these: Pay attention to your state’s specific rules regarding LLC fees. You can often pay these fees online through the state’s official business website. Some states allow for monthly, quarterly, or annual payments, so it’s crucial to stay on top of this requirement.
6. Quarterly Estimated Tax Payments
- When it’s due: Four times a year (April 15, June 15, September 15, January 15).
- What it is: If your LLC is taxed as a corporation or if it has employees, you may need to make estimated quarterly tax payments to the IRS. These payments are based on the income your business generates, and failing to pay them can result in penalties.
- How to meet the deadline: You can calculate your quarterly tax payments using IRS Form 1040-ES. It’s important to keep track of your LLC’s revenue and expenses to determine the proper amount to pay each quarter.
7. State and Federal Taxes (Income and Employment)
- When it’s due: Typically by April 15 of the following year, unless your LLC has elected to be taxed as a corporation.
- What it is: Your LLC is responsible for filing both state and federal taxes, including income and employment taxes if applicable. While LLCs are pass-through entities (meaning that the LLC itself does not pay taxes, but instead income is reported on the members’ tax returns), you will still need to file certain tax forms.
- How to meet the deadline: Ensure you file all the required forms, including your personal income tax return (Form 1040), as well as any additional forms required by the IRS, such as Schedule C. If you’re unsure about your tax obligations, consider consulting a tax professional.
8. Sales Tax Permit and Other Licensing Requirements
- When it’s due: Varies by state and industry.
- What it is: If your LLC sells products or services, you may need to obtain a sales tax permit or other industry-specific licenses and permits. These requirements depend on the nature of your business and where you operate.
- How to meet the deadline: Visit your state’s revenue website to apply for a sales tax permit and check local ordinances to make sure you have all the necessary business licenses. This is an ongoing responsibility, and you should stay on top of renewal dates for these permits.
9. Foreign LLC Registration (if applicable)
- When it’s due: As soon as you plan to operate in another state.
- What it is: If your LLC is conducting business in a state other than the one where it was formed, you may need to file for foreign LLC registration in that state.
- How to meet the deadline: Research the requirements for foreign LLC registration in any states where your LLC will operate outside of its home state. This usually involves filing with the Secretary of State and paying an additional fee.
10. Professional and General Liability Insurance
- When it’s due: As soon as possible, ideally within the first few weeks of operation.
- What it is: While not a deadline in the traditional sense, it’s essential for LLC owners to secure the appropriate types of insurance. This can include professional liability insurance, general liability insurance, or workers’ compensation insurance, depending on your business type and size.
- How to meet the deadline: Research the specific insurance needs for your business and consult an insurance provider to get coverage in place.
Conclusion
Owning an LLC comes with many legal responsibilities that begin the moment you form your business. Missing even one of these deadlines can lead to financial penalties, administrative headaches, or the loss of your LLC’s good standing. Therefore, it’s crucial to stay organized and plan for these key dates in your LLC’s first year and beyond.
Consider working with a legal or accounting professional (Devon Liljenquist is certified in both) to ensure you meet all your deadlines. With the right planning, your LLC can remain compliant and operate smoothly throughout its first year and beyond.
Disclaimer: This post is a general overview of this topic and is not a substitute for a formal opinion from an attorney or tax accountant. This article is not sufficient guidance to avoid tax-related penalties. Should you need a formal opinion, Liljenquist Law is willing to provide such an opinion which would be the subject of a separate engagement letter.
