At the Jacobson Law Firm, a significant part of our practice is business law, including formation of businesses, serving as "outhouse counsel" (for companies that can't afford in-house counsel) and serving as registered agents for many of our business clients. For Texas business entities (LLCs, corporations, limited partnerships, etc.), there are two required annual reports that must be filed by May 15th: the Public Information Report (PIR) and the Franchise Tax Report, which for most small businesses is a "Report of No Tax Due" (RONTD). Stay with me here...
The PIR lists the people who are in charge of the business (directors, managers, general partners, members, etc.). The RONTD is, as the name indicates, a statement that the business doesn't have enough assets to have to pay franchise taxes. Failure to file either report can get the business's certificate of formation revoked and result in involuntary termination - meaning that the liability shield that the owners can disappear altogether. This is a bad thing.
Another bad, and related, thing is that many business owners don't remember they have to file these reports, and they rely on the annual reminder the Comptroller sends out. Here's the problem: most of our business clients have not received this reminder for 2018 yet. A contact at the Comptroller's office told my staff earlier this week that they've had a number of complaints that the notice hasn't been received, and we can verify that most of the clients for whom we serve as registered agents haven't received their notices. Guess what? Failure to receive the notice doesn't relieve the business from having to timely file the reports.
So, Texas business owners, be sure to get your reports filed by the May 15 deadline! Your CPA can help you with the RONTD - they probably did it when they did your tax return. Either they or your attorney can help you with the PIR. Both forms are also available on the Comptroller's website at the following link: comptroller.texas.gov/taxes/franchise/forms/2018-franchise.php
As always, this legal information is based on Texas law because I'm a Texas lawyer. It's not legal advice, and each case is different, so be sure to contact your attorney (or CPA, in this case) if you have questions about your situation.
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