On November 3, 2022, Title 15 of the Pennsylvania Statutes known as the “Associations Code” went through multiple changes. This is the first time substantial changes have been made to the Code in the last twenty years. The update went into effect on January 2, 2023. This will be a multipart series to provide summaries of the key changes. This particular blog will discuss the annual report requirements virtually all entities are now required to complete.
Who Needs to File a Report?
Starting in 2024, all of the following Pennsylvania entities will need to file an annual report:
- Pennsylvania domestic filing entities
- Domestic limited liability partnerships
- Domestic electing partnerships
- Registered foreign associations
Note that newly formed entities and newly registered entities are required to file their first annual report the calendar year after their formation or registration in Pennsylvania.
What needs to be filed?
The annual report can be filed online with the Department of State for a fee of $7. While a form has not yet been developed, the information that will need to be provided includes:
- Name of the entity and jurisdiction of formation;
- Name of its commercial registered office provider or the address of its registered office in Pennsylvania;
- Name of at least one director or manager (or entity equivalent);
- Names and titles of principal officers (if any);
- Address of its principal office; and
- Entity number or similar identifier issued by the Pennsylvania Department of State.
When does the annual report need to be filed?
As the update became effective January of 2023, the first annual report will not be due until 2024. There are three deadlines to be aware of:
- If you are a corporation (profit or non profit) – the deadline is July 1
- If you are a Limited Liability Corporation – the deadlines is October 1
- All other entities required to file an annual report – the deadline is December 31
The Pennsylvania Department of State plans to send out reminder notices to entities two months before filing deadline, but entities should not rely on this. Failure to receive such notice does not excuse any entity from its filing obligation.
What if we forget to file the annual report?
One of the benefits of these annual reports is that it will free up names of entities that are no longer in use. If an entity fails to file an annual report, the Department of State will commence the process for administrative dissolution or cancellation. During the time that the entity is administratively dissolved or canceled, the name becomes available for use. Additionally, the entity’s activities are limited only to those necessary to wind up its activities and affairs and liquidate its assets.
It is possible to have the entity reinstated or to avoid dissolution. Prior to starting the proceeding, the Department of State will send a notice of failure to file an annual report. The entity will then have 60 days to submit the report. After 60 days, the entity may correct the dissolution or cancellation by applying for reinstatement. This requires the entity to:
- File a reinstatement application,
- File the most recent annual report not filed,
- Pay fees for each annual report not filed ($15 each) and
- Pay a reinstatement fee ($35 online, $40 if a paper filing).
It is important to note that if the entity name is taken, the entity will have to reregister with a different name.
This failure to file procedure will not come in effect until January 2027.
Again, this is just one of the many updates to the Title 15 statute, but it is one that almost all entities will need to know and comply with annually. As long as your entity is in compliance by the due date each year the process is relatively simple, inexpensive, and intuitive. If you do have any questions about this or any other Title 15 updates, reach out to our experienced attorneys for help!