What is an annual report? A guide for small businesses

Published Thursday 23 July 2026

Table of contents

• What is an annual report?
• Types of annual reports
• What goes in an annual report
• Key sections of a corporate annual report
• Annual report vs. 10-K filing
• Do small businesses need to file annual reports?
• What to include in a small business annual report
• What happens if you don't file an annual report
• Tips for managing annual report compliance
• Simplify your annual reporting with Xero
• FAQs on annual reports

Key takeaways

• An annual report is a document that summarizes a company's financial performance and operations over the past 12 months; for small businesses, the term also refers to a required state filing that keeps your business in good standing.
• Corporate annual reports are designed for shareholders and investors, while state annual reports are compliance filings submitted to your secretary of state's office.
• Most US states require LLCs, corporations, and other registered entities to file an annual report, and missing the deadline can result in late fees, loss of good standing, or even administrative dissolution.
• Tracking your finances with accounting software makes it easier to pull together the data you need for any type of annual report.

What is an annual report?

An annual report is a comprehensive document that details a company's activities and financial performance over the preceding year. The term covers 2 distinct types of documents, depending on the context.

For publicly traded companies, an annual report is a formal publication shared with shareholders, potential investors, and regulators. It includes financial statements, management commentary, and highlights of the year's operations. The Securities and Exchange Commission (SEC) requires public companies to file these reports each year.

For small businesses, "annual report" more commonly refers to a state compliance filing. Most US states require LLCs, corporations, and other registered business entities to submit an annual report (sometimes called a statement of information or periodic report) to the secretary of state's office. This filing confirms your business's current details, such as your registered agent, principal address, and officers or members.

Types of annual reports

Understanding the difference between the 2 main types of annual reports helps you figure out which ones apply to your business.

• Corporate annual reports: these are detailed publications that public companies create for shareholders and the investing public. They include audited financial statements, a letter from the CEO, strategic outlook, and operational highlights. Their primary purpose is transparency and investor relations.
• State annual reports (compliance filings): these are shorter forms filed with your state's secretary of state office. They update the state on basic information about your business, such as your registered agent, business address, and the names of owners or officers. Their primary purpose is maintaining your legal right to operate.

Some small businesses also choose to create voluntary internal annual reports to review their own performance, set goals, and share results with stakeholders like lenders or partners.

What goes in an annual report

The contents of an annual report vary depending on whether you're producing a corporate shareholder report or filing a state compliance document.

A corporate annual report for a publicly traded company typically includes highlights of the company's activities and performance during the previous year, future goals and objectives, a letter to shareholders from the CEO or company president, an auditor's report, and detailed financial statements. The financial statements, including the balance sheet, income statement, and cash flow statement, provide information about the company's current financial position, profitability, and ability to meet its obligations.

A state compliance annual report is much simpler. It typically asks for your business name, principal office address, registered agent details, names of officers or managing members, and sometimes a brief description of your business activities. Some states also require you to report basic financial information or pay a franchise tax along with the filing.

For small businesses, even a simple internal annual report can be valuable. According to Xero Small Business Insights, businesses that use accounting software or a bookkeeper to monitor their finances are more likely to report earning more than expected, while those using no tracking tools are most likely to fall short of income expectations.

Key sections of a corporate annual report

If you're reviewing a public company's annual report or creating a detailed report for your own business, these are the sections you'll typically find.

• Letter to shareholders: a message from the CEO or president summarizing the year's performance, challenges, and strategic direction.
• Business overview: a description of the company's products, services, markets, and competitive position.
• Financial statements: the balance sheet, income statement, and cash flow statement, which together show the company's financial health.
• Management's discussion and analysis (MD&A): management's explanation of the financial results, including trends, risks, and future expectations.
• Auditor's report: an independent auditor's opinion on whether the financial statements are accurate and comply with accounting standards.
• Notes to financial statements: additional context and detail on the numbers in the financial statements, including accounting methods and assumptions.

Annual report vs. 10-K filing

These 2 documents are related but serve different purposes, and it's easy to confuse them.

A 10-K is a standardized filing required by the SEC for all publicly traded companies. It follows a strict format and includes detailed financial data, risk factors, legal proceedings, and executive compensation. The 10-K is primarily a legal and regulatory document.

An annual report, by contrast, is a more reader-friendly publication. Companies often include photographs, charts, and narrative sections designed to engage shareholders and the public. Many companies use the annual report as a marketing and communication tool alongside the 10-K.

In practice, some companies combine the 2 into a single document, while others publish a glossy annual report separately from their 10-K filing. Small businesses that aren't publicly traded don't need to file a 10-K at all.

Do small businesses need to file annual reports?

In most US states, yes. If your business is registered as an LLC, corporation, limited partnership, or other formal entity, you're likely required to file an annual report with your state's secretary of state office.

The specifics vary by state. Some states require filings every year, while others require them every 2 years (biennial reports). A few states don't require annual reports for certain entity types. Filing fees also differ, ranging from around $10 in some states to several hundred dollars in others.

Sole proprietors and general partnerships typically don't need to file annual reports with the state, though they may still have other reporting obligations like business license renewals or tax filings.

The financial data you capture for these reports also reflects broader market conditions. Xero Small Business Insights data shows US small business sales growth averaged 2.4% year-over-year in 2025, roughly half the long-term average of 5.5%. Annual reports can reveal performance gaps that headline economic figures may not show.

What to include in a small business annual report

Whether you're filing a state compliance report or creating a voluntary report for your own records, here's what to prepare.

For a state filing, you'll typically need to provide the following:

• Your business's legal name and any assumed names (DBAs).
• Principal office address and mailing address.
• Registered agent name and address.
• Names and addresses of officers, directors, or managing members.
• A brief description of your business activities.
• Your Employer Identification Number (EIN) or state tax ID.

For an internal business review, you might also include:

• A summary of revenue, expenses, and profit for the year.
• Cash flow highlights and trends.
• Key milestones or achievements.
• Goals and priorities for the coming year.
• Customer growth or retention data.

What happens if you don't file an annual report

Missing your annual report deadline can create real problems for your business. The consequences vary by state, but they tend to escalate the longer you wait.

• Late fees and penalties: most states charge a late fee, which can range from $25 to several hundred dollars depending on the state and entity type.
• Loss of good standing: your business may lose its "good standing" status with the state, which can prevent you from getting loans, entering contracts, or doing business in other states.
• Administrative dissolution or revocation: if you fail to file for an extended period, the state can administratively dissolve your LLC or revoke your corporation's authority to do business. Reinstating your entity after dissolution often involves additional fees and paperwork.
• Personal liability exposure: for LLCs and corporations, losing your formal business status could mean losing the liability protections that come with it.

Tips for managing annual report compliance

Staying on top of your annual report deadlines doesn't have to be complicated. A few simple habits can help you avoid penalties and keep your business in good standing.

• Mark your deadline on a calendar: check your state's secretary of state website for your specific due date. Set a reminder at least 30 days in advance so you have time to gather information.
• Keep your business information current: update your registered agent, business address, and officer information whenever changes occur, rather than scrambling at filing time.
• Use accounting software to track your finances: having organized, up-to-date financial records makes it faster to compile any financial data your state requires, or to create a voluntary performance review.
• Know your state's requirements: filing frequency, fees, and required information vary by state. Check whether your state requires annual or biennial filings, and whether you need to pay a franchise tax at the same time.
• Consider professional help: if you operate in multiple states or have complex filing requirements, a registered agent service or your accountant can help you stay compliant.

Simplify your annual reporting with Xero

Pulling together the financial data for an annual report is much easier when your books are organized and up to date. Xero's cloud accounting software keeps your finances in one place, with bank feeds that automatically import transactions, customizable reports that give you a clear view of your performance, and tools that help you stay organized.

Whether you're filing a state annual report or reviewing your year-end numbers, having accurate financial data at your fingertips saves time and reduces stress. Get one month free.

FAQs on annual reports

Here are some frequently asked questions about annual reports.

How do you write an annual report?

Start by gathering your financial statements, key performance metrics, and a summary of the year's highlights and challenges. For a state filing, complete the required form on your secretary of state's website with your current business details.

Is an annual report the same as a 10-K?

No. A 10-K is a standardized regulatory filing required by the SEC for public companies, while an annual report is a broader, often more visual document designed for shareholders and the public. Small businesses don't file 10-Ks.

How often do you need to file an annual report?

Most states require annual filings, though some require biennial (every 2 years) reports. Check your state's secretary of state website for your specific deadline and filing frequency.

What is the difference between an annual report and a financial statement?

A financial statement is a specific document, like a balance sheet or income statement, that shows your financial data. An annual report is a broader document that includes financial statements along with other information like management commentary, business highlights, and strategic plans.

Can a small business create its own annual report?

Yes. While state compliance filings are handled through your secretary of state's office, you can create a voluntary internal annual report using your financial reporting data. This can be a useful tool for reviewing performance, setting goals, and sharing results with partners or lenders.