Annual Reporting in Pennsylvania: A Penwell Primer

This article will briefly overview Pennsylvania’s new annual report requirements, including who is required to report, required reporting information, and penalties.

What Created the Reporting Requirement?

On November 3rd, 2022, Governor Tom Wolf signed Act 122 of 2022 (the “Act“) into law, which created a new annual report requirement for domestic and foreign filing associations under 15 Pa.C.S. §§ 146, 381-383. The Act repealed the previous decennial reporting requirement for these entities.

Who is Required to Report?

In Pennsylvania, the following entities and associations must deliver an annual report to the Pennsylvania Department of State (the “Department” ):

1. Domestic business corporations;
2. Domestic nonprofit corporations;
3. Domestic limited liability (general) partnerships;
4. Domestic electing partnerships that are not limited partnerships;
5. Domestic limited partnerships (including limited liability limited partnerships);
6. Domestic limited liability companies;
7. Domestic professional associations;
8. Domestic business trusts; and
9. All registered foreign associations.

Definitions for the above entities and associations can be found in 15 Pa.C.S. § 102.

What Must You Report?

The annual report must be signed by the entity or association and, on behalf of the entity or association, must state:

1. Its name and jurisdiction of formation;
2. The address of its registered office, if any, including street and number, if any, in Pennsylvania;
3. The name of at least one governor (a director, member, partner, etc. Depending on the type of association);
4. The names and titles of its principal officers, if any;
5. The address of its principal office, including street and number, if any, wherever located; and
6. Its entity number or similar identifier issued by the department.

The information in the annual report must be up to date as of when the report is delivered to the Department.

The fee for filing an annual report depends on the entity or association filing:

• Business corporations, limited liability companies (“LLCs”), limited partnerships (“LPs”), and limited liability general partnerships (“LLPs”) – $7.00.
• Nonprofit corporations and any LPs or LLCs with a not-for-profit purpose – $0.00.

However, there is no fee for filing a report or processing a change if a correction is required.  More information about filing fees may be found in 15 Pa.C.S. § 153.

What if My Report is Incorrect?

If an annual report does not contain the information required under 15 Pa.C.S. § 146, the Department must:

1. Reject the report;
2. Promptly notify, in writing or by e-mail (if provided), the reporting entity or association in a record of the rejection; and
3. Return the report for correction.

However, if you need to change any of the information in an annual report, you can deliver a new annual report to the Department, which includes a statement that this latest report contains a change to prior reported information.

Of note, if the registered office provided by the entity or association in an annual report differs from the registered office in the Department’s records, the Department will consider the entity or association to have changed its registered office address to the one in the report as of the filing.

When Must You Report?

Starting in 2025, annual reports must be delivered to the Department each year, and:

1. Before July 1st in the case of a domestic or foreign corporation (for-profit or not-for-profit);
2. Before October 1st in the case of a domestic or foreign LLC; and
3. On or before December 31st, in the case of any other form of domestic or foreign association.

Under 15 Pa.C.S. § 146, the Department must deliver notice to each association required to file an annual report annually at least two (2) months before their report is due.  If (a) the Department fails to deliver notice to any party, or (b) any party fails to receive notice of an annual report filing requirement, the affected party is not relieved of their filing requirement.  When filling out their annual report, a filer must ensure their address is correct to receive these and other notices. Further, associations also have the ability to provide an e-mail address for additional notifications.

What are the Penalties?

Under 15 Pa.C.S. § 381, the Department may initiate a proceeding to (a) administratively dissolve a domestic filing entity or (b) cancel the statement of registration of a domestic LLP or the statement of election of an electing partnership that is not also a LP if the entity does not deliver an annual report to the Department within six (6) months of their filing date. This penalty applies to annual reports due on or after January 4th, 2027.

If the Department determines they should begin a proceeding under 15 Pa.C.S. § 381, then 15 Pa.C.S. § 382 requires the Department to deliver a notice to the entity of this determination at the entity’s registered office (if any) and the address of the entity’s principal office as shown in its most recently filed annual report.  Once the Department provides notice, the entity has sixty (60) days to deliver its required annual report or proof to the satisfaction of the Department that the annual report was delivered.

If the entity fails to provide the required annual report in sixty (60) days, the Department must (a) if the entity is a domestic filing entity, administratively dissolve the entity by filing a statement of administrative dissolution that states the effective date of dissolution (which must be than sixty (60) days after the date of delivery of the required notice); or (b) if the entity is a domestic LLP or an electing partnership that is not also an LP, administratively cancel its statement of registration or statement of election by filing a statement of administrative cancellation that states the effective date of cancellation.

Once the proceeding is complete, the Department must deliver a copy of the statement of administrative dissolution or statement of administrative cancellation to the entity at its registered office (if any) and the address of its principal office, as shown in its most recently filed annual report.

What are the Consequences?

A domestic filing entity that has been administratively dissolved under 15 Pa.C.S. § 382:

1. Continues to exist as the same type of entity but may not carry on any activities except those necessary to wind up its activities and affairs and liquidate its assets in the manner provided in its organizational documents or to apply for reinstatement under 15 Pa.C.S. § 383;
2. Continues to be managed by or under the direction of its governors, who:
   1. Continue as such;
   2. Have full power to wind up its activities and affairs or apply for reinstatement; and

• Remain subject to the same standards of conduct as before administrative dissolution; and

3. Is not currently subsisting for purposes of 15 Pa.C.S. § 145during the period it is administratively dissolved.

A domestic LLP or electing partnership that is also not a limited partnership whose statement of registration or statement of election is administratively canceled under 15 Pa.C.S. § 382 continues its existence as a general partnership but not as an LLP or electing partnership.

An LP that is also an LLP or electing partnership must file an annual report as a filing entity. If such an LP does not file an annual report with the Department as required, it will be subject to administrative dissolution rather than cancellation of its statement of registration or election.

During its administrative dissolution, termination, or cancellation, the entity’s name (domestic or foreign) will be available to any other filing association.  If another association has taken the name of the senior association seeking reinstatement, the association that has appropriated the name may keep the name, and the senior association seeking reinstatement (in the case of domestic entities) or reregistration (in the case of foreign registrations) must choose a new name.

What Are My Remedies?

15 Pa.C.S. § 383 allows an entity that has been the subject of an action under 15 Pa.C.S. § 382 to deliver to the Department an application for reinstatement along with the reinstatement fee required by 15 Pa.C.S. § 153.  The application must (a) be signed by the entity and (b) state:

1. The name of the entity at the time of the action under 15 Pa.C.S. § 382and, if needed, a name that is available under Subchapter A of Chapter 2;
2. Subject to 15 Pa.C.S. § 109(relating to the name of commercial registered office provider in lieu of registered address), the address, if any, including street and number, if any, of the entity’s registered office;
3. The principal office of the entity at the time of the application for restatement; and
4. Either:
   1. That the grounds for action under 15 Pa.C.S. § 382did not exist; or
   2. That the most recent annual report not previously filed is attached to the application for reinstatement along with the fee for each of the annual reports that should have been paid under 15 Pa.C.S. § 153.

The Department will determine whether an application for reinstatement satisfies the requirements of 15 Pa.C.S. § 383 and includes all required fees. If the Department determines that the application and fees are correct, they shall:

1. Cancel the prior action under 15 Pa.C.S. § 382by filing a statement of reinstatement that includes the effective date of reinstatement within thirty (30) days after receipt by the Department of the application; and
2. Deliver a copy to the entity.
3. If the entity is reinstated, then the following rules will apply:
4. Except as provided in paragraphs 4 and 5 below, the reinstatement relates back to and takes effect as of the effective date of the administrative dissolution or cancellation.
5. The entity’s activities between the date of its administrative dissolution and the date of its reinstatement are valid as if the administrative dissolution had never occurred.
6. If the entity is an LLP, limited LLLP, or electing partnership, its statement of registration, the provisions of its certificate of LP required by 15 Pa.C.S. § 8201(f), or its statement of election is reinstated as if its administrative cancellation had never occurred.
7. If the application for reinstatement includes a name other than the name of the entity at the time of the administrative dissolution or cancellation because the original name is no longer available under Subchapter A of Chapter 2, the statement of reinstatement shall have the effect of amending:
8. If the entity is a domestic filing entity, its public organic record to provide for the new name;
9. If the entity is a domestic limited liability partnership, its statement of registration to provide for the new name; or

• If the entity is an electing partnership that is not also a limited partnership, its statement of election to provide for the new name.

5. A person’s rights arising out of an act in reliance on the administrative dissolution or revocation of the statement of registration or election before the reinstatement is effective are not affected.

Where Can I Get More Information?

If you have more questions about your annual report requirements or need help filing or reviewing your annual report, please contact Penwell Law at [email protected] or visit our website at www.penwelllaw.com.

Sources:

[1] ​Annual Reports in Pennsylvania. https://www.dos.pa.gov/BusinessCharities/Business/Resources/Pages/Annual-Reports.aspx