Let’s say your business has been chugging right along for several years now. You formed an LLC or incorporated in order to establish a solid legal foundation for your company. But what loose ends do you still need to tie up as you move into the new year?
Don’t let any minor administrative requirements fall through the cracks and put you at risk for major trouble, such as losing your personal liability protection. Review the scenarios listed here to get your business ready to rock and roll and start the new year right:
Have You Stopped Working on a Business?
Did you stop working on a business and are now putting your attention elsewhere? If so, you need to take the necessary legal steps for corporate dissolution. This lets your state know that your business is no longer in operation. Otherwise, you can still be on the hook for filing your dead business’ annual reports, filing state/federal tax returns, and keeping up any business licenses.
To officially close a business with the state you’ll need to file an “Articles of Dissolution” or “Certificate of Termination” with the Secretary of State’s office wherever your LLC or Corporation was established.
Have You Changed Your Business Name?
Did you decide to make a change to your business name last year? If so, make sure you have updated your name in all the necessary places.
Start with a DBA (Doing Business As) to ensure that you have legally registered your new name. Then make sure you update your Articles of Amendment so that your documents have the updated name.
Are You Lacking the Right Business Permits?
Many new business owners think that forming an LLC or corporation is the same as getting a business license. But they realize this isn’t the case when they are fined for operating without a license.
Depending on what kind of business you run and where you live, you may need to get several business licenses or permits. These include sellers’ permits, zoning permits, permits from the health department, professional licenses, a general business operation license and home occupation permits.
Making sure you have all the necessary permits is crucial.
Do You Owe Taxes?
As they say, nothing is certain but death and taxes. Many small business owners with good intentions soon find themselves getting behind in their tax payments.
If you owe back taxes from a previous year, ignoring the problem won’t make it go away. Instead, contact the IRS about setting up a payment plan. The IRS will stretch out your due date for your taxes, but you have to ask them. Otherwise, hefty late fees will just pile up on top of what you already owe.
Do You have Intellectual Property?
It’s time to file a trademark or patent. Doing so will protect your brand or idea and ensure no one else makes money off of it.
Has Your Business Fallen Out of Compliance?
If your company is in bad standing with the state, it’s a good idea to bring it back into compliance now. That way you can still enjoy the tax benefits of being a corporation or LLC in the coming year.
Businesses can fall into bad standing for a variety of reasons. For example, you didn’t file your annual report and pay the associated fees for a year or two. Or you haven’t filed your business’ state franchise taxes. The specific steps to get back into good standing will vary based on your state and the reason why you fell out of compliance in the first place.
As the new year begins, it’s time to cross these items off your to-do list. It’s the best way to get your business ready to rock in 2015.
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Nellie: Will it be easier to file the papers to start or change an existing company in 2015?
Hi Martin –
Can you please clarify your question? Nothing can be retroactively filed, so if you are looking to incorporate or Form an LLC, it will need to be done for the new year since we are already in 2015.
Yes above point can really make any business flow, but it is also important to adapt to changes from time to time, so as to give correct name to the business found.
Great insight. Thanks for reading and commenting!
It’s always nice to do a check on what’s going on in your business. It is a good way to make sure that your business is performing well and is in coherence with the national standards.
Yes it is. Thanks Aira!
Actually, not just the previous year tax debt. IRS can give you more than a headache for back taxes and other tax problems, regardless of they were from 2014 or some years behind. It’s always a good idea to start the year trying to get your tax situation straight.