With the New Year comes this reminder – it’s time for some Company maintenance. A few simple, but critically important things need to be done for those with businesses. Here is a partial list of critical requirements:
1. All Corporations, Companies, Partnerships or other legal entities registered with a state’s Secretary of State need to file their “Annual Report” for the new year. Â These “Annual Reports” update company/entity information with the Secretary of State’s office, including any changes in ownership or membership, any changes of address or status (active to inactive, etc.), changes of business type, or other relevant changes.
More than anything, the Annual Report is a mandatory requirement that keeps a company’s legal status “current” and in compliance with state law, therefore preserving the liability limitations that corporate/company registration bestowed.
And it’s the states’ opportunity to get a small fee every year.
Failure to file the Annual Report will result in the Company being “Not In Good Standing,” or some similar term, and could mean the loss of the limited liability protection, loss of the company’s ability to sue in the state of registration, or other unpleasant consequences.
2. Schedule and give notice of your “Annual Meeting.” Â This is a requirement of most “organization” documents for most corporate entities, and therefore failure to do so jeopardizes the existence and protections of the entity.
3. Renew local and/or state business licenses, authorizations, etc.
4. Consider upcoming leases or other business decisions approaching in the year. What do you need to do now to prepare for that event?
â€¢ Give specific notice of cancellation of any contracts or arrangements (many of which may require 30 days or other notice?
â€¢ Consider other space and rents in anticipation for a lease negotiation, renewal or cancellation?
â€¢ Consider expansion to new or larger space?
â€¢ Service contract renewals, renegotiations or finding new (and possibly better) providers?
5. Pay city, state, federal or other taxes?
6. Franchise fees or other subscriptions due for renewal?
7. Adjustments to insurance coverages?
These are just some of the many considerations that should be visited in January, in anticipation of decisions and requirements throughout the year.
Small steps now can make the rest of the year smoother, more productive and more profitable, and will allow the corporate entity to maintain the important legal protections that shield owners from liability or other business perils.
Please contact me for a more comprehensive list of annual corporate “to do’s.”
I would be pleased to assist in any of your company or other legal or business needs.