The year is quickly coming to an end and we’re all thinking: Where did the year go? As a small business owner, you’re probably already thinking about the next year and all of the exciting projects you have lined up. But before you get in too deep with future plans, be sure that your business is 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 & Paperwork
It’s important to keep your business in good standing especially if you’ve gone to great lengths to incorporate and legitimize your small business. Here are a few important recordingkeeping steps to take and paperwork to file before the year ends.
Have you held an annual meeting this year? If you’re an LLC or corporation, it’s important that you hold an annual meeting before the year ends. This is where you make important decisions for the year and make sure the owners, shareholders, and board members are all on the same page.
An important part of holding annual meetings is recordkeeping through Corporate Minutes. These minutes summarize what’s been decided and what’s been discussed at these meetings. Each state has its own regulations. Find out if your state requires Corporate Minutes.
Statement of Information
Not to be confused with Annual Corporate Reports, 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 of your business, including the names of your directors, members, and Registered Agent. If you haven’t established an official point of contact, we can help you find a Registered Agent in your state.
Depending on your state, filing your Statement of Information can be done every year or even two years. And if your state requires you to file a Statement of Information, there’s usually a specific due date (e.g., anniversary of your business’s incorporate date or end of the calendar year). You can be subjected to penalties and late fees if you miss your deadline.
If you’re unsure how to get started on your Statement of Information, you can leave it up to the professionals. We have experienced lawyers waiting to help. They can help determine what you need to file and even take care of the filing for you.
Articles of Amendment
Did your business move this year? Did a board member leave? Did you change the name of your company? If you made any changes to your business, you need to file Articles of Amendment to the state you’re doing business in. It’s important that you notify your state on any changes so your business stays in good standing and your paperwork is up to date.
Estimated Tax Payments
Before the year ends, it’s important that you assess your estimated tax payments. Make sure you haven’t overpaid or underpaid, and review closely how much your business made year to date. If you need to make any adjustments, make sure you do it before the deadline.
If you’re feeling overwhelmed, we have experienced tax attorneys to answer any questions you may have.
Employees and Contractors
Be sure to review all the annual earnings of your full-time employees (W-2s) and independent contractors (1099s) so the paperwork is ready to be filed, reported, and submitted early next year. Staying organized and being well prepared before the hard deadline can help make things less stressful if something unexpected happens.
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 safer to invest in. With more funds, you’ll have more options and resources to build your budding small business into an empire in the future.
And if you think you’re not ready to grow and scale your company quite yet, incorporating can still benefit you as a small business owner by sheltering your personal assets and maybe even saving you some money on your taxes.
Ready to incorporate? Check out these resources to help make your decision and process simple.
- Business Structure Comparison Quiz – Find out which business entity will meet your needs.
- Where to Form an LLC? An Interactive Map – Choose the state you want to start your LLC in.
- Incorporation – If you’re still stuck, we have incorporation specialists that are ready to help.
What are you big plans for the new year? We’d love to hear from you below in the comments!