LLC compliance glossary

Plain-language definitions of the terms that show up across StayOnFile. Each definition is a few sentences. For state-specific specifics, see the relevant state page.

Administrative dissolution

When a state cancels an LLC for failing to file required reports or pay required fees. The entity is no longer in good standing and generally cannot enforce contracts in court until reinstated. Most states allow reinstatement within a window (commonly 1–5 years) after paying back fees.

Anniversary-based deadline

A filing deadline pegged to the LLC's formation date (e.g., "by the end of the anniversary month"). Contrast with a calendar deadline, which is the same date for every entity in the state.

Annual report

A periodic filing — usually annual, sometimes biennial — confirming or updating an LLC's registered agent, address, and member/manager information. Specific names vary: Statement of Information (CA), Periodic Report (CO), Public Information Report (TX). The deadline and fee depend on the state.

Calendar-based deadline

A filing deadline that is the same date every year for every LLC in the state, regardless of when the LLC was formed (e.g., May 15 in Texas).

Certificate of good standing

An official document from the Secretary of State confirming an LLC is up to date on its filings and fees. Required for opening business bank accounts, qualifying to do business in another state, and many financing transactions.

Foreign registration

Registering your LLC to do business in a state other than the one where it was formed. The "foreign" state has its own annual report and fee, separately from your home state.

Franchise tax

A recurring tax on the privilege of being incorporated in a state, paid in addition to (or sometimes in lieu of) income tax. Calculation methods vary widely: flat fee, revenue-based, capital-based, or a margin-style calculation. Not every state has one; among those that do, the rules differ significantly.

Good standing

A status indicating an LLC has filed all required reports and paid all required fees. Lose it and you may be unable to enforce contracts, qualify in other states, or maintain certain licenses. Most states publish a real-time good-standing lookup on the Secretary of State website.

Late fee

A penalty assessed for filing an annual report or paying franchise tax after the deadline. Late fees may be flat (a fixed dollar amount), tiered (escalating with days late), or combined with interest on unpaid taxes.

LLC (limited liability company)

A US legal entity type that combines pass-through taxation with limited personal liability for its owners (members). Governed at the state level; rules differ across the 50 states and DC.

Manager-managed LLC

An LLC governed by one or more designated managers (who may or may not be members). Contrast with member-managed, where every member shares management authority by default.

Member-managed LLC

An LLC governed by its members directly, without separately appointed managers. The default management structure in most states.

Operating agreement

The internal contract among LLC members covering ownership, profit and loss allocation, voting, management, and exit. Required by some states (CA, NY, MO, ME, DE), strongly recommended in all of them.

PLLC (professional LLC)

A specialized LLC for licensed professionals (lawyers, doctors, accountants, etc.) in states that require it. Subject to the same compliance regime as a regular LLC plus profession-specific licensing rules.

Registered agent

A person or company designated to receive legal mail and service of process on behalf of an LLC. Every state requires one. The agent must have a physical address in the state of formation and be available during business hours.

Reinstatement

The process of restoring an administratively dissolved LLC to good standing. Typically requires paying back fees and penalties for every year the LLC was out of compliance, plus a reinstatement filing fee. Some states require additional steps like reserving the original name or refiling articles.

S-corp election

A federal tax election (IRS Form 2553) under which an LLC is taxed as an S corporation. Affects payroll and self-employment tax treatment but does not change the LLC's state-level compliance regime — annual reports and franchise tax are still owed as for any other LLC in that state.

Secretary of State

The state agency responsible for business entity filings in most states. A handful of states use a different agency name (Arizona Corporation Commission, Maryland State Department of Assessments and Taxation), but the function is similar: business formation, annual reports, and good-standing records.

Single-member LLC

An LLC with one owner. Federally taxed by default as a "disregarded entity" (the LLC's income flows onto the owner's personal return). State compliance — annual reports, franchise tax — applies the same as for multi-member LLCs.

Statement of Information

California's name for what most states call an annual report. Required every two years (biennial) for California LLCs, in addition to the state's separate franchise tax.