The paperwork that kills companies is never the difficult paperwork. It is a $138.75 form that took four minutes and was due four months ago.
1. Missing the annual report
This is the big one, and it is big because the penalty is disproportionate to the mistake. In Florida the annual report costs $138.75 and is due 1 May. File it on 2 May and the state adds $400.
That late fee is not a negotiation. Florida provides no mechanism to abate or waive it, so the “I only just moved and never got the notice” conversation ends the same way every time. Keep ignoring it and the company is administratively dissolved at close of business on the fourth Friday of September — and once dissolved, reinstatement costs $100 plus every year’s missed report fee.
The window opens 1 January. There are four months in which this costs $138.75 and eight in which it costs $538.75 or your company. Put it in a calendar the day you form, not the first time you get a reminder.
And check what your state actually does, because they are wildly inconsistent. Wyoming charges no late fee at all — it simply dissolves the company sixty days after the due date. Delaware charges $200 plus 1.5% a month. Massachusetts gives you two consecutive missed years and ninety days’ written notice. Arizona does not require an LLC annual report at all.
2. Being your own registered agent, badly
It is legal in every state to serve as your own registered agent, and for some owners it is the right call. The mistake is not doing it — it is doing it without the two things it requires.
First, an actual physical address in the state, available during business hours. Not a PO box. Second, the discipline to update the state when you move. The registered agent’s address is where lawsuits get delivered, and service of process is effective when it is delivered to that address, whether or not anyone was there to take it.
What that means in practice
A lawsuit served at an address you moved away from is still served. The clock on your response starts anyway, and the first you hear of it can be a default judgment. Courts are not generous about this — the address was your responsibility to keep current.
There is also the quieter cost: your registered agent address is published. If it is your home address, that is on the public record for as long as the company exists.
3. Treating the business account as your account
You formed the LLC for limited liability. Commingling is how you give it back.
Paying a personal expense from the business account, or a business expense from your own, does not just complicate bookkeeping. It is the primary evidence a plaintiff uses to argue the company is not genuinely separate from you — and if that argument lands, your personal assets are back in play. This is the one item on this list with no cap on the downside.
The fix is procedural, not clever. One account for the business. Pay yourself by transfer or payroll, and record it. When you need the company to buy something personal, do not; take a distribution and buy it yourself.
4. Not registering for taxes you have already triggered
Forming an entity registers you with one agency. It does not register you with your state’s revenue department, and those are the registrations with the sharper teeth.
- Sales tax. If you sell taxable goods or services, you generally have to register before your first sale, not at the end of the quarter. Collecting tax without being registered is its own problem; failing to collect it does not remove your liability for it.
- Employment taxes. One employee triggers a set of registrations — withholding, unemployment — that are separate from your entity filing and separate from each other.
- Marketplace sales. If you sell through a platform that collects tax for you, you may still owe a registration and a return, even if the amount due is zero. “The marketplace handles it” is true about the collection and often false about the filing.
Unpaid sales tax is also frequently a personal liability for the responsible person, in a way that unpaid income tax is not. It is worth ten minutes of certainty.
5. Assuming one state’s registration covers you everywhere
Forming in one state does not authorize you to do business in another. Cross a line — an office, an employee, inventory, property — and that second state generally expects you to register as a foreign LLC before you start.
Florida’s consequences for skipping it are a fair illustration of how seriously states take this. An unregistered foreign LLC may not maintain a lawsuit in Florida. It owes every fee it should have paid. And it owes a civil penalty of $500 to $1,000 for each year it operated without registering. The contracts you signed remain valid — you may simply be unable to go to court to enforce one.
The pattern in all five
None of these are caused by not understanding the rule. They are caused by nobody owning the date. The rules are simple, public and mostly unchanging; what fails is the assumption that a notice will arrive in time, at an address that is still current, and be opened by someone who recognizes what it is.
Sources
- Florida annual report fee, deadline, $400 late fee and the September dissolution date: Florida Division of Corporations, sunbiz.org. Foreign qualification penalties: Fla. Stat. ss. 605.0902 and 605.0904.
- Wyoming sixty-day dissolution and the absence of a late fee: Wyoming Secretary of State business FAQ and fee schedule effective 1 July 2026. Delaware $200 plus 1.5% per month: Delaware Division of Corporations. Massachusetts two-year rule: MGL c. 156C s. 70. Arizona: Arizona Corporation Commission business services FAQ.
- All checked 9 September 2026. State requirements differ; this article describes the pattern, not your specific obligations.