October 6, 2023
Pennsylvania’s New Annual Reporting Requirements
In 2024, Pennsylvania will implement new annual reporting requirements as part of Act 122 signed into law by Governor Wolf on November 3, 2022. This replaces the previous decennial reporting with an annual reporting process for both domestic and foreign filing associations.
At Wilke CPAs & Advisors, we believe that understanding the “why” and “what” behind these changes is crucial for our clients. Here’s a breakdown of what you need to know:
The Shift to Annual Reports
Gone are the days of the decennial report. Act 122 replaces this with an annual reporting requirement, aligning Pennsylvania with the practices of most other states. This shift to annual reporting brings increased transparency and accountability to businesses operating within the state.
Who Needs to File?
The annual report filing is mandatory for a wide range of business entities, including:
- Domestic business corporations
- Domestic nonprofit corporations
- Domestic limited liability (general) partnerships
- Domestic electing partnerships that are not limited partnerships
- Domestic limited partnerships (including limited liability limited partnerships)
- Domestic limited liability companies
- Domestic professional associations
- Domestic business trusts
- All registered foreign associations
What’s in the Annual Report and Key Deadlines
The annual report is a comprehensive document that provides essential information about your association. You are required to provide details such as the business name, jurisdiction of formation, registered office address, names of governors or directors, names and titles of principal officers (if any), address of the principal office, and the entity number issued by the Pennsylvania Department of State.
Compliance isn’t just about knowing what to report; it’s also about when to report. The deadline for filing the annual report varies depending on the type of association. For all corporations, both business and nonprofit, domestic and foreign, the deadline falls on June 30th of each year. Limited liability companies, whether domestic or foreign, have until September 30th, and all other domestic filing entities and foreign filing associations must submit their annual reports by December 31st annually. Missing these deadlines can result in administrative dissolution or termination – a scenario best avoided.
It’s essential to note that there is a nominal fee associated with filing the annual report. Business corporations, limited liability companies, limited partnerships, and limited liability general partnerships are required to pay a $7 fee, while nonprofit corporations and certain LPs or LLCs with a not-for-profit purpose have a $0 fee.
The Role of the Pennsylvania Department of State
The Pennsylvania Department of State plays a crucial role in ensuring associations meet their reporting obligations. They will send notifications to the registered office address of each association, reminding them of the impending annual report deadline at least two months before it is due. However, it’s essential to keep your information up-to-date with the Department, especially the registered office address, to guarantee receipt of these notifications. Failure to receive a notice does not absolve you from your obligation to file the annual report.
Transition Period and Consequences
This shift to an annual reporting requirement represents a significant change for Pennsylvania, and Act 122 acknowledges this by providing associations with a transition period. Administrative dissolution, termination, or cancellation for failure to file annual reports will not be imposed until the 2027 calendar year. However, after this grace period, associations that neglect their annual reporting obligations will face these consequences six months after the due date of the annual report.
In the case of non-compliance leading to dissolution or termination, there is an opportunity for reinstatement, without any time limitations. However, this reinstatement must be accompanied by an application fee and payment for each delinquent annual report that was not previously submitted.
Your Partner in Compliance
Wilke CPAs & Advisors is here to help you navigate the new annual reporting landscape. While Act 122 represents a significant change for businesses operating in the state, it is designed to ensure that vital information is readily available to stakeholders and regulatory bodies. Reach out to the Wilke team for any assistance or questions you may have regarding the annual reporting requirement.