If the state where an LLC is registered requires an annual report, the venture may face legal implications in the event of failure to provide it. The exact types of penalties depend on the specifics of state legislation. In most of them, the owner will first be notified of missing the regular reporting deadline. From that point, the grace period for remedying the violation will start. If the enterprise still does not file a report, it will lose its good standing, which will entail a number of restrictions such as the inability to renew the license or expand to another state. Besides, the state has the right to impose sanctions on the firm, involving penalties or even involuntary dissolution.