How to Keep Your LLC in Good Standing

Forming an LLC is only the first step in an ongoing process. Once the paperwork is filed and the entity exists, there are several obligations you’ll be required to keep up with as you maintain your LLC. These requirements vary from state to state, but the basic idea is the same everywhere: good standing has to be maintained, not just earned once.

What does it mean to keep an LLC in good standing?

For an LLC to be in good standing means that it is current on all the filings, compliance, and fee requirements its state requires. That status generally supports the LLC’s ability to conduct business, enter contracts, and open a business bank account. It’s also a requirement for getting a certificate of good standing, which is a document some banks, lenders, and business partners will ask to see before working with a business.

For more information on how to obtain a certificate of good standing, check out our article on the topic.

What do I need to do to keep my LLC in good standing?

Keeping an LLC in good standing requires staying on top of several obligations.

File annual or biennial reports

Most states require LLCs to file a periodic report, either every year or every two years, confirming basic information about the business and paying a filing fee. Deadlines vary widely. Some states set a fixed calendar date for every LLC, while others tie the deadline to your LLC’s original formation date. Check your specific requirement rather than assuming it matches what you’ve heard from another state. For more details on this process, see our annual report guide.

Pay state fees and franchise taxes

Many states charge an annual fee or franchise tax on LLCs, and in some states this is separate from the annual report filing fee. Both the amount and the process for paying it can differ a lot from one state to the next. California, for example, charges LLCs a minimum annual franchise tax, while Delaware charges a flat annual LLC tax. Other states use their own formulas or flat fees. Falling behind on these payments typically leads to penalties and interest, and eventually to a loss of good standing. Check your state’s tax agency or Secretary of State for current amounts and due dates.

Maintain a registered agent

Every LLC is required to keep a registered agent with a physical address in the state where the company was formed, and in any state where it’s registered to do business. This is the person or company designated to receive legal and official documents on the LLC’s behalf. If your registered agent resigns, moves, or otherwise becomes unreachable and you don’t change your registered agent in your state filing, your LLC can fall out of good standing even if every other obligation has been met, so update your registered agent information as soon as anything changes.

Keep business licenses and permits current

Any licenses or permits your business needs to operate legally will have their own renewal schedules, separate from state LLC filings. An expired license or permit can affect your standing and your ability to keep operating, so keep careful track of these deadlines.

Update state records when information changes

If your LLC’s name, address, registered agent, or ownership structure changes, most states require you to file an update. Leaving outdated information on record creates compliance risk down the line and can affect your standing even if the change itself seemed minor at the time.

Maintain separation between personal and business finances

Mixing personal and business finances doesn’t directly cause a loss of good standing with the state, but it can undermine the liability protection that an LLC is meant to provide. A dedicated business bank account and clean, separate records are part of running a properly maintained LLC, even if they aren’t something the state checks for directly.

How do I renew my LLC for my business?

“Renewing” an LLC usually means filing your annual or biennial report and paying the associated fee. It isn’t a matter of re-registering the business from scratch.

Here’s what the process generally looks like.

1. Log into the Secretary of State’s online portal for the state where your LLC is registered.
2. Locate your LLC’s filing using the business name or registration number.
3. Confirm or update the information on file, including address, registered agent, and members or managers as required by your state.
4. Pay the filing fee.
5. Keep a copy of the confirmation for your records.

Many states send a reminder notice before the deadline, but you shouldn’t rely on that notice alone. Mail gets lost, addresses change, and notices sometimes go to an old registered agent. Setting your own reminders will help you avoid missing any deadlines in case the notice never reaches you.

If your LLC is registered as a foreign LLC in other states, keep in mind that you’ll generally need to file reports in each of those states too, not just your home state.

Renewal requirements, deadlines, and fees vary significantly from state to state, so verify the current requirements on your Secretary of State’s website before filing.

What happens if you don’t renew an LLC?

Missing your renewal obligations can set off a chain of consequences that gets more serious the longer it goes unaddressed.

• Most states charge late fees or penalties for missed filings. These can add up quickly if the LLC falls behind for more than one filing cycle.
• The state may mark your LLC as not in good standing, which can affect your ability to enter contracts, open bank accounts, secure financing, or obtain a certificate of good standing.
• If the LLC stays non-compliant long enough, the state can administratively dissolve or revoke it.
• Depending on your state, members of a dissolved LLC that keeps operating may become personally exposed to business debts and obligations.
• An administratively dissolved LLC’s name can become available for another business to register, which means you could lose the name you built your brand around.
• Getting back into good standing after dissolution usually means paying back fees, penalties, and interest, plus a reinstatement fee. This is often more expensive than staying current would have been.

These consequences are serious, but in many cases they’re fixable if you address them promptly. If your LLC has already fallen out of good standing, our LLC reinstatement article covers the process of getting back on track.

How to stay on top of LLC compliance

Putting a few simple systems in place will go a long way when it comes to preventing compliance from slipping through the cracks.

• Start by building a compliance calendar that maps every annual obligation, including report deadlines, fee due dates, and license renewals, into one place with reminders set well in advance.
• Consider using a registered agent service, since some include compliance reminders as part of their offering.
• If your state allows it, set up automatic payments for annual fees to reduce the risk of a missed due date.
• Once a year, log into your Secretary of State’s portal and review your filing record to confirm everything is current.
• Keep your operating agreement and internal records up to date.

Conclusion

Keeping an LLC in good standing isn’t complicated. It just requires keeping up with a set of obligations that are recurring and predictable. It matters, too, since the cost of staying current is usually lower than the cost of reinstating a dissolved LLC later.

If you don’t already have a compliance calendar in place, now is a good time to build one. And if you’re not sure where your LLC currently stands, it’s a good idea to check your state’s Secretary of State portal to confirm, or use our LLC lookup guide.

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