So, you've formed your LLC, opened the bank account, and maybe even landed a few clients. You're in business. But the job's not over once the paperwork is filed. Just like owning a car, your LLC needs regular maintenance to stay in good shape—and to avoid fines, fees, or even dissolution by the state.
This annual maintenance checklist is your go-to guide for what needs to be done every year to keep your LLC compliant, credible, and protected. Some of the steps are legally required. Others are simply smart habits that will make your life easier and your business stronger.
1. File Your Annual Report (If Required)
Many states require LLCs to file an annual or biennial report. This report typically confirms your business address, ownership structure, and registered agent. It's how the state keeps tabs on your company's status—and it's often tied to your LLC's good standing.
What happens if you don't file?
- You could be hit with late fees or penalties
- Your LLC could be administratively dissolved
- You may lose liability protection until it's reinstated
Action step: Check your state's filing deadline (usually the anniversary of your formation date or a fixed calendar month) and mark it on your calendar. File online if possible—it's faster and often cheaper.
2. Pay the Annual Franchise Tax or State Fees
Some states, like Delaware and California, require LLCs to pay an annual franchise tax or minimum business tax, regardless of income. Even if you made $0 this year, you might still owe the state a filing fee or flat tax.
Examples:
- California: $800 annual franchise tax
- Delaware: $300 flat fee for LLCs
- Texas: Franchise tax report required if revenue exceeds a threshold
Action step: Look up your state's LLC tax or fee requirements and pay on time. Don't assume that zero revenue means zero obligation.
3. Maintain a Registered Agent
Your LLC must have a registered agent on file at all times—a person or company designated to receive legal and government documents on your behalf. If your agent quits or moves, you're responsible for updating that information with the state.
Why this matters:
- Missed lawsuits or notices can result in default judgments
- Your business could fall out of good standing
- States may impose penalties for inaccurate contact info
Action step: Confirm that your registered agent information is current. If you use a service, make sure your account is active and paid up. If you're your own agent, verify that your address is accurate and someone is always available during business hours.
4. Keep Your Operating Agreement Up to Date
Even if you're the only member of your LLC, your Operating Agreement is the internal blueprint of your business. It lays out how decisions are made, how profits are divided, and what happens if the business winds down or brings in new partners.
Over time, your business evolves. You might add a new partner, take on a big project, or change your compensation structure. If your Operating Agreement doesn't reflect those changes, you could face legal issues later.
Action step: Review your Operating Agreement each year. Update it to reflect any significant changes in ownership, roles, voting rights, or distribution rules. Store signed copies securely, and give each member a copy.
5. Renew Business Licenses and Permits
Forming an LLC isn't the same as being licensed to operate. Many businesses need local, state, or industry-specific licenses to legally do business. These often expire and need to be renewed annually.
Common license types include:
- General business licenses
- Sales tax permits
- Health or food handling permits
- Home occupation permits
Action step: Check expiration dates on all permits. Renew early to avoid late fees, fines, or disruption of services. If your business changed locations or services, you might need new licenses altogether.
6. File Federal and State Tax Returns
LLCs must file taxes, even if no money changed hands. Depending on how your LLC is taxed (sole proprietorship, partnership, S-Corp, or C-Corp), your filing requirements will vary. But skipping your return—even if there's no tax due—can result in penalties or future problems.
Key documents may include:
- Form 1040 with Schedule C (for single-member LLCs)
- Form 1065 (for multi-member LLCs)
- Form 1120S (if taxed as an S-Corp)
- State income or franchise tax returns
Action step: Work with a tax professional to ensure you're filing the correct forms based on your tax election. Don't forget to issue 1099s if you paid contractors more than $600 during the year.
7. Track and Separate Business Finances
This one isn't always required by law—but it's absolutely essential for protecting your LLC status. Commingling business and personal funds is one of the fastest ways to “pierce the corporate veil†and lose your liability protection.
Best practices include:
- Keeping a dedicated business bank account
- Using accounting software or a bookkeeper
- Storing receipts and categorizing expenses
- Reconciling accounts monthly
Action step: Set a recurring date each month to update your books. At year's end, generate a profit and loss statement for tax prep and financial planning.
8. Review Insurance Policies
Your business changes. So should your insurance. Whether you've hired staff, leased a space, or added new services, your risk profile might be different than it was 12 months ago.
Key policies to review:
- General liability insurance
- Professional liability or E&O insurance
- Workers' comp (if you have employees)
- Cyber liability insurance (for online businesses)
Action step: Schedule an annual policy review with your insurance agent. Ask about coverage gaps or bundling discounts.
9. Hold an Annual Meeting (Even If You're Solo)
While not required by all states, holding an annual meeting is a good business practice. It keeps you focused on goals, documents major decisions, and can serve as additional legal proof that your LLC is a legitimate business—not just a hobby.
Even single-member LLCs can benefit from taking notes on decisions related to big purchases, strategic shifts, or financial plans.
Action step: Schedule a yearly meeting. Keep written notes (called minutes) of what you discuss. If you have partners, make sure everyone signs off on major decisions.
Keep the Gears Turning Smoothly
An LLC isn't a “set it and forget it†kind of entity. It needs regular attention to stay compliant, protected, and poised for growth. With this annual checklist, you can knock out the essentials and steer clear of penalties, lapses, or surprises.
Taking the time each year to review your LLC's health isn't just about rules and regulations—it's a chance to step back, check your progress, and make smart decisions for the road ahead. Think of it as your business's annual tune-up. Your future self (and your accountant) will thank you.