by Brandon Baker
Limited liability companies, or “LLCs,” have become very common in the business marketplace. One of the primary benefits of the LLC business entity, as opposed to the corporation or the limited partnership, is the LLC’s ease of operation. However, “low maintenance” does not equal “no maintenance.” Thus, Oklahoma LLC owners need to be attentive to certain annual maintenance requirements for their company.
Oklahoma LLCs, unlike corporations, are not required to pay annual franchise tax to the Oklahoma Tax Commission. Instead, LLCs must file an Annual Certificate with the Oklahoma Secretary of State each year and pay a $25 annual fee. The Annual Certificate is a simple form which recites the LLC’s name, states the street address of its principal place of business, and confirms that the LLC is an active business entity. The Annual Certificate is due each year on the anniversary of the LLC’s creation (the date the Articles of Organization were originally filed with the Secretary of State).
The process of filing the Annual Certificate is now conducted almost entirely through email and online filing. The Secretary of State sends an annual reminder to the LLC’s email address of record prior to the anniversary date (usually two months in advance). The annual reminder email contains a link, which the LLC’s owner or officer can use to file the Annual Certificate online.
However, a surprisingly high number of LLCs fail to file an Annual Certificate each year. If just one Annual Certificate is not filed in a timely manner, the LLC ceases to be in good standing under state law. The loss of good standing prevents the LLC from filing lawsuits, filing documents with the Secretary of State (other than an Annual Certificate), and may hinder contractual business dealings, though it does not totally prevent them. The good news is that the Secretary of State has streamlined the process for reinstating an inactive LLC. An LLC can simply file an application for reinstatement, along with all past-due Annual Certificates, and payment of accrued annual fees.
The Oklahoma LLC is an excellent choice for those looking to form a new business entity. Though they are extremely user-friendly, Oklahoma LLCs do involve some ongoing annual maintenance. Please feel free to contact our office if you have any questions or concerns about your current company, or if you are considering the formation of a new business entity.