Maintaining an LLC, or limited liability company, involves meeting the requirements of of your state's relevant regulatory agency as well as the state's taxing authority and the IRS. Certain record-keeping is required by law but is almost crucial to successfully filing required reports, anyway. Strong record-keeping will also help you stay compliant and current with your taxes.
Maintain records of income, expenses, purchases, deductions and assets. Income is whatever the business earns. You can use cash register tapes, bank deposit slips, receipt books, invoices or credit card slips. Expenses are costs you incur while doing business. These records must show the amount of the expense and that it is actually for the business. Purchases are items you buy and sell. Deductions may include travel, transportation, gifts and entertainment. Assets are anything the business owns. Keep records of when you bought assets, what you paid, and how much each has depreciated or contributed to gains or losses.
Maintaining employee records is required by law in some instances. The IRS requires you keep records of employee names, addresses and start and end dates of work for four years. You must also register employees with the IRS and your state in order to pay employee taxes.
Most states require that retailers or service providers collect sales or use tax on goods and services. Register your LLC with the state taxing authority and apply to remit taxes through the state's online or electronic funds transfer program, as applicable. If you are a foreign corporation — that is, one that is incorporated in one state but doing business in another — you may have to register for and remit taxes in the foreign state, too. Failure to maintain an LLC in a foreign state may not impact your standing with your original state, but if you lose standing in your home state, you will probably lose foreign registration.
Annual reports must be filed in a timely manner with the secretary of state's office or its assigned authority in your state. Failure to do so or to pay associated fees may result in an administrative dissolution, where the state agency dissolves your LLC for failure to satisfy its rules or demands.
You must have a registered agent in the state where your business is registered. If your business has a physical location, the LLC may serve as its own registered agent. If the business does not have a physical location, it may hire a registered agent. The registered agent receives legal notices and process for the business. If an LLC fails to maintain a registered agent, it may be subject to administrative dissolution.
References & Resources
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