What Compliances Does Your US Entity Actually Need Every Year?
Zero revenue does not mean zero filings — Form 5472 is still due every year, and missing it starts at a $25,000 penalty regardless of whether your entity earned a single dollar.
Every foreign-owned US entity owes Form 5472 with a pro forma Form 1120 annually, a state annual report or franchise tax (typically $0-800/year depending on the state), and registered agent renewal ($50-300/year), whether or not the company had any revenue. Add sales tax registration once you cross economic nexus, and BOI reporting if it applies to your entity. Total ongoing compliance for most founders runs $500-1,500/year on the US side alone.
This guide is for founders who already have a formed US LLC or C-Corp and want the complete annual compliance picture — not just the one-paragraph summary buried in a formation guide. It covers every recurring US filing, the real penalties for missing each one, and the India-side obligations that run in parallel.
One assumption worth correcting early: an inactive or pre-revenue entity is not an exempt entity. Every filing below still applies even if your company hasn't sent a single invoice.
What compliances does a US entity need every year?
Every foreign-owned US LLC or C-Corp has four recurring obligations at minimum: Form 5472 with a pro forma Form 1120, a state annual report or franchise tax filing, registered agent renewal, and — where applicable — BOI reporting. Sales tax registration gets added the moment you cross economic nexus in any state.
None of these are optional based on revenue, activity, or how small the company is. They're tied to the entity's existence and ownership structure, not its performance.
What is Form 5472 and why is it the most missed filing?
Form 5472 is an IRS information return required for any US entity that's 25%+ foreign-owned, filed together with a pro forma Form 1120 — even at zero income or activity. It's the single most-missed filing among foreign-owned entities because founders assume "no revenue" means "nothing to file."
What state-level filings are due, and when?
Every state where you're incorporated or foreign-qualified requires some form of annual report or franchise tax filing, though deadlines and amounts vary widely. Delaware corporate filings are due by March 1 each year; Wyoming requires a flat annual report fee tied to your formation anniversary month.
| State | Filing | Typical deadline | Typical cost |
|---|---|---|---|
| Delaware (C-Corp) | Annual Franchise Tax Report | March 1 | $175-400+ minimum |
| Wyoming (LLC) | Annual Report | Formation anniversary month | $60 flat |
| New Mexico (LLC) | None required | N/A | $0 |
| Nexus/foreign-qualified state | Foreign entity annual report | Varies by state | Varies, often $50-300 |
What happens if your registered agent lapses?
Every US entity must maintain a registered agent with a physical address in its state of formation, to receive legal and tax notices on the company's behalf. If this lapses — commonly because a $50-300/year renewal invoice gets missed — the state can administratively dissolve the company or place it out of "good standing."
Losing good standing status can block bank account access, contract execution, and fundraising due diligence until the company is formally reinstated, which itself carries reinstatement fees on top of the original renewal cost.
When do you need to register for sales tax?
Sales tax registration becomes mandatory once you cross a state's economic nexus threshold — commonly $100,000 in sales or 200 transactions in that state within a year, though exact thresholds vary. This is entirely independent of your incorporation state or your existing federal filings.
This is the compliance obligation founders are least likely to track proactively, since nothing about Form 5472 or your state annual report gives any signal that a sales tax obligation has just been triggered elsewhere.
Do you still need to file BOI reports?
Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act requires disclosing individuals who own or control the company to FinCEN. Requirements and enforcement around this rule have shifted since it was introduced, so the safest approach is confirming current status directly with your filing agent or CPA before assuming it does or doesn't apply to your entity this year.
What do you owe on the India side, every year?
US compliance is only half the picture. As an Indian tax resident funding or owning a US entity, you also carry recurring obligations back home.
- RBI Liberalised Remittance Scheme (LRS) reporting: any funds sent to the US entity from India as a resident individual are tracked against the $250,000/year LRS cap.
- Overseas Direct Investment (ODI) reporting: ongoing reporting obligations under FEMA tied to your holding in the foreign entity, with penalties of up to 3x the amount involved for non-compliance.
- Indian income tax disclosure: foreign assets and any attributable income must be disclosed in your Indian income tax return every year, regardless of whether cash was repatriated.
What does the compliance calendar look like across one year?
The filings that apply to you depend on whether you have employees, use contractors, or run payroll at all — most guides list only the base filings and skip this. Here's the full picture, grouped by category, with the actual due dates.
Federal tax filings (every entity, regardless of activity)
| Filing | Due date | Applies to |
|---|---|---|
| Form 5472 + pro forma Form 1120 | April 15 (LLCs); or your corporate tax deadline, typically also April 15 for calendar-year C-Corps | Every 25%+ foreign-owned entity, even at zero revenue |
| Form 1120 (full corporate return) | April 15 for calendar-year C-Corps, or the 15th day of the 4th month after fiscal year-end | C-Corps with any income |
| Extension (Form 7004) | Filed by the original deadline, extends to October 15 | Any entity needing more time |
| BOI report (initial) | Within 30-90 days of formation, per current FinCEN rules | Most small entities — confirm current status with your filing agent |
State-level filings
| Filing | Due date | Applies to |
|---|---|---|
| Delaware Annual Franchise Tax Report | March 1 | Delaware C-Corps and LLCs |
| Wyoming Annual Report | First day of your formation anniversary month | Wyoming LLCs and C-Corps |
| Registered agent renewal | Varies by provider, typically tied to formation date | Every entity, every state |
| Foreign qualification annual report | Varies by state | Entities registered as a "foreign entity" in a nexus state |
If you have US employees
| Filing | Due date | Applies to |
|---|---|---|
| Form 941 (quarterly payroll tax) | April 30, July 31, October 31, January 31 | Employers withholding federal income/FICA tax |
| Form 940 (federal unemployment, FUTA) | January 31 | Employers paying $1,500+ in wages in any quarter |
| W-2 and W-3 to employees and SSA | January 31 | Any entity with W-2 employees |
| State unemployment insurance (SUTA) filings | Varies by state, typically quarterly | Employers in states with SUTA registration |
If you use US contractors instead
| Filing | Due date | Applies to |
|---|---|---|
| Form 1099-NEC to each contractor | January 31 | Any contractor paid $600+ in the year |
| Form 1096 (transmittal summary) to IRS | January 31 | Filed alongside 1099-NECs if paper-filing |
| Form W-8BEN collection (foreign contractors) | Collected before first payment, not an annual filing | Entities paying non-US contractors |
Once you cross economic nexus (sales tax)
| Filing | Due date | Applies to |
|---|---|---|
| Sales tax returns | Varies by state — monthly, quarterly, or annually based on sales volume | Entities registered in a state after crossing its economic nexus threshold |
India-side filings
| Filing | Due date | Applies to |
|---|---|---|
| LRS remittance reporting | At the time of each remittance, via your Indian bank's AD (Authorized Dealer) branch | Resident individuals funding the US entity from India |
| ODI reporting (Form FC / APR) | Annual Performance Report typically due by December 31 for the prior financial year | Anyone with reportable ODI in a foreign entity |
| Foreign asset/income disclosure in Indian ITR | July 31 (or extended due date) for the financial year ending March 31 | Indian tax residents with foreign entity ownership or income |
What compliance checklists don't tell you
The riskiest year is often the first one, not the busiest
Founders assume compliance risk grows with revenue. In practice, we see the most missed filings in year one, when the entity is pre-revenue and founders genuinely believe nothing is due yet — exactly the assumption Form 5472 is designed to override.
A dormant entity still accrues franchise tax and penalties
Founders who pause a US entity — stop actively using it but don't dissolve it — still owe state franchise tax and Form 5472 every year it legally exists. We've seen "dormant" entities accrue thousands in unpaid franchise tax and late fees before a founder realizes the company was never actually inactive in the state's eyes.
US and India compliance calendars don't align, and that gap is where things get missed
The US filing year runs on the calendar year; the Indian financial year runs April to March. A founder tracking only one calendar reliably misses deadlines on the other side, since nothing forces the two systems to remind each other.
A real compliance miss: what it cost
An Ahmedabad-based founder paused his Wyoming LLC after his e-commerce brand didn't gain traction, planning to "deal with it later" rather than formally dissolving the entity. He assumed no revenue meant no filings were accruing.
Fourteen months later, wanting to restart under the same entity for a new product line, he discovered the company had been administratively dissolved for a missed annual report, and two years of Form 5472 filings were outstanding despite zero activity.
We filed the delinquent Form 5472s, paid the Wyoming reinstatement fee, and restored good standing. Because the missed 5472s were filed voluntarily before any IRS notice, penalty exposure was minimized — but reinstatement and back-filing still cost meaningfully more than simply dissolving the entity properly would have.
Frequently asked questions
What compliances does a US entity need every year?
Every foreign-owned US entity needs Form 5472 with a pro forma Form 1120, a state annual report or franchise tax filing, registered agent renewal, and BOI reporting where it still applies. Sales tax registration is added once you cross economic nexus in a state.
Do I need to file anything if my US company had zero revenue?
Yes. Form 5472 and the state annual report are both due regardless of revenue or activity. Zero revenue does not remove any filing obligation.
What happens if I miss Form 5472?
The penalty starts at $25,000 per form and adds another $25,000 for every 30-day period beyond 90 days after an IRS notice, with no maximum.
What is BOI reporting and do I still need to file it?
Beneficial Ownership Information reporting under the Corporate Transparency Act requires disclosing who owns or controls the company. Requirements have shifted since the rule was introduced, so confirm current status with your filing agent before assuming it does or doesn't apply to you.
What happens if my registered agent lapses?
Your company can be administratively dissolved or lose its good standing status, which can block bank account access, contract signing, and fundraising due diligence until it's reinstated.
Do I need to file sales tax returns even with a Delaware or Wyoming entity?
Yes, if you cross economic nexus thresholds in states where you have customers, commonly $100,000 in sales or 200 transactions a year. Your incorporation state has no bearing on this obligation.
Can I do these compliances myself without a CPA?
Form 5472 and the pro forma 1120 are technical enough that most founders use a US CPA, since errors can trigger the same $25,000 penalty as not filing at all. State annual reports are simpler and often filed directly by founders or their registered agent.
What's the difference between US-side and India-side compliance?
US-side compliance covers Form 5472, state filings, and BOI reporting with the IRS and Secretary of State. India-side compliance covers RBI's Liberalised Remittance Scheme reporting, ODI filings under FEMA, and disclosing foreign income or assets in your Indian tax return.
How much does annual US entity compliance typically cost?
Most foreign-owned entities spend $500-1,500/year on Form 5472 and pro forma 1120 preparation, plus $50-300/year for registered agent renewal and $0-800/year for state franchise tax or annual reports, depending on the state.
Never miss a filing on either side.
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