Franchise Tax, also known as Annual Report, is a type of tax demanded by the State from companies established by taking advantage of the privileges here. In order for this tax to be paid correctly, you need to know the various criteria for the type and operation of your company. An annual report is a document containing comprehensive financial information about public companies, nonprofits, partnerships, and other businesses. It includes their financial performance and activities compared to the previous financial year. Most states require annual reports to be submitted. If they don’t, they may lose their corporate designation and the tax benefits that come with that designation. Beyond the legal requirements, the annual report also helps attract new investors, maintains the trust of existing stakeholders and informs creditors about the company’s financial condition.