Starting a Business

What kind of financial reports are minimally required of an LLC, and how often should they be made available to the partners?

min read
Opinions expressed by Entrepreneur contributors are their own.
Minimally, LLCs are required to file annual tax returns and the members (owners) of an LLC would receive a copy of Form K-1, which is an information return that needs to be filed.

However, other provisions of your operating agreement may provide for more frequent disclosure. For example, your operating agreement may provide for (at least) quarterly distributions to the members in amounts that enable them to pay the estimated taxes on the income they will receive from the LLC.

When it comes to P&Ls and balance sheets, some company owners want to track their financial metrics as frequently as monthly. Also, members of an LLC are generally entitled to review the books and records of the company during business hours upon reasonable notice.

You want the members to feel that they have enough information to satisfy their curiosity, without being inundated by paperwork. If your operating agreement is silent about this, it's best to work out a regular procedure for financial reporting reviews with your accountant. Even better, ask your partners how often they want to see the information.

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

It Started As a Joke and Turned Into a Startup That Raised $1 Million in Funding