We’re entering the home stretch of 2018. While it’s easy to become overwhelmed with end of the year sales, not to mention holiday planning and parties, business owners should take time to make sure their business is legally in good standing before the year ends. Keeping in good standing with the law is important for the future and growth of your business.
Here are some important steps to complete on your end of the year legal checklist:
RECORDKEEPING. Having an annual meeting is the bare minimum you can do to stay in compliant with the law. If you are a corporation, it’s important that you hold an annual meeting before the year ends. This is where you reelect the directors and the directors reelect the officers. The law wants to see that you are treating your corporation as a separate entity and following corporate compliance. This important step preserves the “Corporate Veil” so you don’t end up getting sued personally.
FILINGS. Each State has its own yearly filing requirements but a Statement of Information is usually required from most business entities in most States. The Statement of Information is filed with your State’s Secretary of State and updates them on important information about your business, including the names of your directors, members, and registered agent. Missing a Statement of Information filing could cost you more than the filing fee.
INCORPORATE YOUR BUSINESS. Although incorporating isn’t a necessary step in the end of the year legal checklist, it’s an essential next step you should take if you want to grow your business in the new year. For one, incorporating allows small businesses to raise capital much more easily since most banks and lenders look at incorporated businesses as more legitimate and eager to invest in. With more funds, you’ll have more options and resources to build your small business into an empire in the future.
TAXES. Before the year ends, it’s important that you assess your estimated tax payments with your tax professional. Make sure you haven’t overpaid or underpaid and review closely how much your business made year to date. Also, make sure you review all your annual earnings of your full-time employees and your independent contractors so the paperwork is ready to be filed, reported, and submitted early next year.
TIE UP ANY LOOSES ENDS. Now is the perfect opportunity to tie up any loose ends you’ve been putting off throughout the year. For example, does your business need a Fictitious Business Name (DBA)? Did you get a Tax ID number (EIN)? Are your licenses and permits in order? Have you setup a benefit plan for your company? It’s not how much you make but how much you can save.
As business owners, you have accomplished more than the average person and you should celebrate every win. Make sure you take time to enjoy all your hard work and accomplishments throughout the year and enter 2019 on the right Legal Foot.
Happy Holidays to all and a Prosperous New Year!
For more information on how to legally protect your business please pick up a copy of my book: ‘Go Legal Yourself’ on Amazon or visit my website at www.baglalaw.com – (760) 784-9109