Has Your HOA Lost its Good Standing Status with the Secretary of State?
Practically all states require that homeowner associations
organized as non-profit corporations file an Annual Report with the
Secretary of State. The purpose is so that important information
such as Registered Agent, Registered Office, and Officers for the
corporation is maintained by the state, that franchise taxes and
other fees have been paid, and that the corporation is in 'Good
Standing' to do business in that state.
It is not unusual for associations to overlook submitting annual
reports. It frequently occurs when developers transition the
association to the resident elected board. It may also occur when
there is a change in the management company or when new directors
and officers are elected.
The consequences of not filing an annual report with the
Secretary of State can include a change in corporate status to
inactive, delinquent, administrative dissolution or loss of good
standing. For clarification, dissolution does not mean the
corporation has ceased its existence nor does it terminate the
authority of the corporation's registered agent. Fortunately,
restoring Good Standing status can generally be remedied by filing
an updated annual report and paying late fees or fines. Having a
current annual report also ensures that the corporation can
receive Service of Process in the event of lawsuits, tax
notices and other official communication.
Click here to learn more about the
serious consequences of losing Good Standing status.
Most states require that the report be submitted annually;
however, some states only require a biennial submission. Despite
the fact that a few states do not require nonprofit corporations to
file an annual report, it is considered best practice to do so.
Some states have different guidelines for 'corporations' versus
'non-profit' corporations. The fees are typically in the $25-$50
range. Most annual reports can be submitted on-line with options to
pay by credit card or by mailing the form and a check. The
deadlines for filing also vary by state.
The responsibility for submitting an updated annual report
usually rests with the association secretary and is fairly
- You will need the legal incorporated name of the association.
The legal name can be found on the association's Articles of
Incorporation or the Covenants.
- Begin with an online search using the keyword phrase "your
state corporation search". For example: "North Carolina Corporation
- Look for an option to search for your association based on the
legal incorporated name.
- The corporate information about your association will indicate
if the status is active or in good standing.
- If your association's status is not in Good Standing, the
Secretary of State website will have instructions and contact
information to assist you in submitting the annual report and
payment of fees.
Additionally, it is advised to take a moment and update your
information with us. Every day, realtors, title companies and
closing attorneys visit HOA-USA.com looking for HOA contact
information for their new homebuyers and sellers. Providing
the HOA address and/or management company information to these
folks is certainly in the best interest of your HOA. Click
HERE to update your HOA