5 Loose Ends to Tie Up Before 2012

We’ve reached the home stretch of 2011. All too soon, fall will give way to winter, and holiday music and merchandise will be all around us. For the small business owner, this is the time of year to make sure you have everything squared away for 2012–because when it comes to some of these decisions, waiting until you write your 2012 New Year’s resolutions will be too late.

loose ends

Here are five things to consider for your small business while it’s still 2011.

1. Do you need to file an annual report for your corporation?

If you’ve incorporated your business, you need to keep it in good standing by following your state’s requirements. Most states require some form of an annual report filing (either every year or every two years). The specific due date for this filing will also depend on your state — in some cases, it’s on the anniversary of your business’ incorporation date; in other cases, it’s when your annual tax statements are due; and in some cases, it’s at the end of the calendar year.

Check with your state’s secretary of state office to learn your specific filing deadline and get your paperwork in on time. Missing this deadline can result in penalties and late fees; in the worst-case scenario, your company can be subject to suspension or dissolution.

2. Do you need to file an “Articles of Amendment” for any changes to your corporation?

Let’s say you made some changes to your business in 2011. Maybe you changed your business address or dropped the .com from your official company name. Maybe a board officer left or you authorized more shares. In most cases, you’ll need to file an official notification with your state of incorporation (known as Articles of Amendment).

Like your annual aeport, filing an Articles of Amendment is a critical step to making sure your LLC or corporation remains in good standing. The implications can be significant. If your business happens to be sued, the plaintiff can try to show that you have not maintained your LLC or corporation to the letter of the law. And if this suit is successful, your “corporate shield” is pierced and the plaintiff can seek recovery against your personal assets.

3. Did you start a new business in 2011? Think about incorporating  before 2012.

If you started a new business in 2011 and still haven’t gotten around to incorporating or forming an LLC, you might want to do so before 2012.

But bear in mind that the “start date” of your corporation isn’t retroactive. So, if your corporation forms on November 1, you’ll still need to file your taxes as a sole proprietor/partnership for January 1 to October 31, 2011 (and then as a corporation for November and December). For this reason, many business owners want to wait until January to incorporate or form their LLC. However, January is the absolute busiest time of the year at your secretary of state’s office. In short, waiting to file until January puts you at the mercy of whatever backlog exists.

There’s another option, and that’s selecting a “Delayed Filing” with a document filing company. With this option, you can get all your paperwork submitted now, and it will be held and filed on the first business day of 2011 (so you’ll be at the front of the line).

4. Do you have an inactive business to close before 2012?

Did you start a venture a few years ago, but have since turned your focus elsewhere? Even if you’re not actively promoting the business and it’s made no revenue for 2011, you still need to file a formal termination of that LLC or corporation. Otherwise, you can still be charged fees associated with the business, you’ll still be expected to file an annual report, and you’ll still need to submit tax returns to the IRS and your state.

If you have an inactive business, you can file “Articles of Dissolution” or “Certificate of Termination” paperwork with the Secretary of State within the state where your corporation or LLC was formed. Keep in mind that in most cases, you’ll need to settle any owed taxes before you can close the business.

You should also cancel any kinds of permits or licenses you hold with the state or county. And if you’ve been using a fictitious business name, you’ll need to file an abandonment form. Make sure to take care of these matters while it’s still 2011. There’s simply no reason to pay an extra cent in fees toward a business you’re not working on. Put that money towards your next venture instead!

5. Are there any other legal loose ends to tie up before 2012?

The last few months of the year offer a perfect opportunity to tie up any loose ends you’ve been putting off. For example: Did you file a DBA (Doing Business As) for your business name? Do you need to file for a trademark? Did you get a Tax ID number (or Employer ID Number)? Are all your necessary licenses and permits in order?

No matter how busy your fourth quarter and holiday schedule get, set aside some time to address your business administrative obligations. By taking care of certain issues in 2011, you can save money in fees and penalties. And in other cases, you can cross a few more things off your list to start fresh in the New Year.


Image from Albert Lozano/Shutterstock

7 Comments ▼

Nellie Akalp


Nellie Akalp Nellie Akalp is CEO of CorpNet, her second incorporation filing service based on her strong passion to assist small business owners and entrepreneurs in starting their business. Free guides, advice and videos on small business legal topics are available at her Small Biz Corner.

7 Reactions

  1. Luckily I have things taken care of on these fronts. However, I am looking at pre-paying some expenses late this year to minimize the tax hit.

  2. Great Post! It’s amazing how these things can seem like they’re crawling up on you when they’ve been waiting the whole year. Some of them, the governmental stuff in particularly, can be expensive, time-consuming and cause severe emotional distress if not handled on time.

  3. Thanks a lot, Nellie!

    Great reminders for all small business owners, (and future small business owners)

    I’m so happy that I incorporated a few years ago.

    The Franchise King®

  4. Whatever happened to the simple beauty of the lemonade stand where we simply satisfied a need in the marketplace?

    “We the sheeple” have been siting back and allowing ourselves to be paper worked to death by elitist “Burons” many of which have never actually met a payroll.

    Is anyone other than me bothered by the constantly growing complications of compliance, that only interferes with, and takes otherwise productive time away from our servicing our end users and customers.

    Is there any wonder that the TEA party movement has such a powerful base.

    Time to start anew, with a clean slate.

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