Introduction to Annual Reports
An annual report informs stakeholders about a company’s activities and performance. It includes financial statements and a discussion of the company’s affairs. Annual reports keep state authorities updated with names of directors, addresses, and other details. Filing late may cost fees, and failing to file could lead to dissolution. Public companies hire auditors to write reports. The report has a letter to shareholders, a business description, audited financials, and notes explaining figures.
Preparation of Annual Reports
The annual report of a company is typically prepared by the management and financial team, in collaboration with auditors. External auditors play a critical role. They ensure financial statements present a true view and offer their opinion on accuracy. The board of directors oversees preparation, reviews and approves statements, discusses performance, and provides guidance.
However, small businesses and non-profits also prepare yearly reports to connect with customers and provide information on past performance and future goals. An annual report letter to shareholders is written by the director. It should be easy to read, informative, contain interesting prose, discuss developments for use as marketing strategies.
Private limited companies are required to file annual accounts and returns disclosing shareholder and director details to authorities. The best place to find reports is the company’s website, in the Investor Relations or Financials section. You can also download from third-party websites. Reading them can be difficult and complex, but you can follow tips to extract valuable information.
Filing and Accessibility of Annual Reports
In the US, specific requirements vary by state and business entity. It’s important to check with the Secretary of State office to determine requirements. Reports intended to give shareholders and interested people information on activities and financial performance over the preceding year. They may be considered grey literature. More often, letters are significantly shorter, around 3,000 words or fewer. Reports usually advance a theme embraced by management and marketing.
Public corporations must provide shareholders annual reports describing operations and financial conditions. They file this comprehensive report to disclose activities during the prior year. The focus is on smaller companies, LLCs and nonprofits. Requirements vary so check with your state.