Annual Report Pennsylvania update: Starting in 2025, Pennsylvania is implementing a significant regulatory change that applies to most domestic and foreign filing associations. Under Act 122 of 2022, businesses must now file an Annual Report, replacing the long-standing decennial report. This change impacts legal entities such as corporations, LLCs, partnerships, and business trusts. In this blog, we’ll walk you through the key aspects of this change and how to stay compliant to avoid penalties.
If you have questions or would like to speak with a compliance expert, please contact sales@entitykeeper.com.
Key Changes Introduced by Act 122 (Annual Report Pennsylvania)
- Annual Report Filing Requirement: Starting January 2025, domestic and foreign filing associations must submit an Annual Report to the Pennsylvania Department of State. This includes entities like corporations, LLCs, partnerships, and business trusts.
- Decennial Report Repealed: The previous 10-year filing cycle has been replaced with an annual reporting requirement, increasing the frequency but streamlining the overall process.
- Filing Deadlines Based on Entity Type: The filing deadline for the Annual Report depends on the type of legal entity:
- Corporations (business and nonprofit): January 1 – June 30
- Limited Liability Companies (LLCs): January 1 – September 30
- Partnerships, business trusts, and professional associations: January 1 – December 31
Compliance Requirements
To meet the new filing requirement, legal entities must submit an accurate and timely report containing the following:
- Business name
- Jurisdiction of formation
- Registered office address
- Principal office address
- Name of at least one governor (e.g., director, member, or partner, depending on entity type)
- Names and titles of principal officers (if applicable)
- Entity number issued by the Department of State
Consequences of Non-Compliance
Failing to comply with the Annual Report filing requirements can result in serious penalties:
- Administrative Dissolution/Termination: Legal entities that fail to file by their respective deadlines may face administrative dissolution, termination, or cancellation of their registrations. For domestic entities, this means losing protection over the business name, while foreign entities will have their registrations terminated.
- Loss of Name Protection: During the dissolution period, the entity’s name becomes available to other legal entities. If another organization registers the name, the dissolved entity must select a new name upon reinstatement or reregistration.
Preparing for Compliance
The Pennsylvania Department of State will send notifications about the Annual Report filing requirement to the registered office address of the legal entity. It is important to note the distinction between a registered office address and a registered agent:
- The registered office address is the official address on file with the Department of State where legal and official correspondence is sent. This address is required for compliance purposes and must be kept up to date.
- A registered agent is an individual or entity designated to receive legal documents on behalf of the legal entity. While a registered agent may operate at the registered office address, they are not necessarily the same.
Legal entities should verify that the correct registered office address is on file, regardless of whether they use a registered agent. Failure to receive a notification due to an outdated or incorrect registered office address does not exempt an entity from the obligation to file the Annual Report.
Recommendations for Legal Entities
To stay compliant and minimize risks, legal entities should:
- Review and Update Records: Confirm all information with the Department of State is current, especially the registered office address.
- Mark Filing Deadlines: Note the relevant deadlines based on the entity type and plan for timely data collection and filing.
- Partner with Compliance Experts: Consider engaging third-party compliance providers who can manage filings on your behalf, automate recurring filings, and minimize operational disruptions.
- File Annual Reports Yourself: If managing filings in-house, utilize the Department’s online filing system. Note that this method requires proactive tracking of deadlines and meticulous attention to detail.
Maintain Smooth Operations
The new Annual Report filing requirement marks a major shift in Pennsylvania’s regulatory landscape. While it simplifies the reporting process compared to the decennial report, it also requires greater vigilance from professionals and proactive measures to ensure timely compliance for their legal entities.
To stay on top of your filings and keep your operations running smoothly, consider partnering with EntityKeeper. We can help automate your filings and ensure you remain compliant, eliminating the risk of penalties. To learn more, contact sales@entitykeeper.com or schedule a meeting at your convenience.
