Year-end Small Business Legal Checklist
While the last few weeks of the year are some of the busiest, it is also a great time to quickly review some of the legal aspects of your businesses to make sure you are ready for the new year, and more importantly, make sure your business is protected. Below are a few things to consider before the new year:
- Make sure your business is an LLC or an INC. If you have a sole proprietorship, or a business that you haven’t incorporated, NOW IS THE TIME TO DO IT. You can’t backdate your incorporation, so you can’t protect yourself from past legal issues or get past tax benefits, but you can get them starting immediately.
- If you do have an LLC or INC— Make Sure You’ve Filed Your Annual Report In North Carolina, it is not enough to just form your LLC or Corporation, every year you need to file an annual report and pay a fee of $200. If you don’t do this, at some point the state will dissolve your company and you will be left unprotected. You can easily check the status of your company by visiting the NC Secretary of State Corporation Search Page (https://www.secretary.state.nc.us/search/index/corp)
- If You’ve made any major changes to your Corporation — File Your “Articles of Amendment” Did you have a change in your company name, an increase in shares, a board member joining or leaving your company? Any of these plus other changes may require you to file a form with the Secretary of State called an “Amendment”. Make sure to file these before the year ends.
- Update the Corporate Books and have an Annual Meeting Just having a Corporation or LLC is not enough, you also need to follow the “corporate formalities”, have an annual meeting, and evidence some of the more major corporate actions in the official records of the company.
- Review vendor agreements and other third party contracts. Many agreements your company has entered into may have already expired, and at this point you are going month to month. This may present some opportunities, as well as some threats. This is an opportunity to negotiate better price points for example, but this may be a threat as the vendor may now be able to cancel or raise price without notice. Pull these old agreements out, and take a look at what needs to get done.
- Review the Contracts you are using with clients It may have been many years since you drew up your contracts you are using with clients, or you may have just pulled them off of Google. Review these contracts to see if you need to update anything, also make sure they are accurate. For example, a simple check is to see “When signing contracts for your business, does the magic word “By:” always appear before the signature?”
- Employees If you have employees, do you have an employee handbook? If not, YOU NEED ONE! Having a valid employee handbook, and following it is one of you best defenses against a lawsuit, or other legal issues with employees. This is also a good time to review employee contracts and deal with any employee or independent contractor issues.
- Taxes As the end of the year approaches you cannot forget taxes. This is the perfect time to begin to compile your receipts, financial reports, and other tax documents. Your CPA or accountant is about to enter his or her busy season, so touching base with them now is the perfect time.
- Contact an Attorney with ANY concerns If you have ANY questions or concerns, a good small business attorney will usually be able to quickly answer your question without charge, or let you know if there is more needed to help you. The Barnes Law Firm is always just a call or email away, but even if you don’t reach out to us, reach out to someone who specialized in business law.