Is Your Business Ready for the New Year? A Handy Checklist for Business Owners
The new year is finally here. Time to sweep up the confetti, discard the empty champagne bottles, and tackle all your business’s year-end obligations so your company is up to date and in compliance in the New Year.
I know you’d rather be thinking about things other than business compliance and tax paperwork right now. But unfortunately, you need to attend to those to-dos if you want to put your business on the right path and avoid costly fines and penalties.
What should you have on your radar screen so you can neatly wrap up the old year and be ahead of the game?
Here’s a checklist to help:
1. Submit your annual report
Although there are a few exceptions, most states require LLCs and corporations to create an annual report either every year or every other year. Does this apply to you? Check your state’s requirements so you don’t miss filing yours. When filing an annual report, you must complete it by a specific annual due date, which may be one of the following:
- The anniversary of your incorporation date
- The date that your annual tax statements are due
- The end of the calendar year
If you file your annual report late, you could get hit with penalties and late fees. But better late than never, so make sure you create and file yours even if you’re running behind schedule.
2. Renew business licenses and permits
If your business needs licenses and/or permits to legally operate, make sure your find out which of them need to be renewed. Contact your municipality, county, and/or state offices to find out. If you don’t have the time or don’t want to be bothered with that, you might consider asking a legal filing service to track down the requirements and administrate the renewals to keep them up to date.
3. Make sure your accounting records are in order
It won’t be long before you need to file your taxes. Why make it more painstaking than it has to be by having your financial and tax information in disarray? Now is the time to organize your paperwork for your accountant or tax preparer. Make sure you have accurate record of your business income, expenses, charitable giving, tax payments, etc., and keep receipts and your last couple of years’ tax returns close at hand in case you need to refer to them.
4. Send 1099s to any independent contractors you used
If you pay a subcontractor $600 or more during the tax year, you’re required to send them a 1099 form. It discloses the compensation you paid them throughout the year. You are responsible for filling out the appropriate 1099 tax form and sending it to independent contractors by Jan. 31.
5. Hold your member/shareholder meeting and write/save minutes of what was discussed
If required, don’t forget to hold your LLC or corporation’s annual meeting before the year has come to a close. When you do, remember to generate written minutes of what took place. And also get your members (if an LLC) or shareholders (if a corporation) to sign off on those minutes.
6. Review your current legal business structure’s effectiveness with your accountant and attorney. Does it make sense to make a change?
If you’re running your business as a sole proprietorship or partnership, you may be wondering if it’s still the best option for your growing business. Before the new year moves too far along, consider talking with legal and financial professionals to find out if you might be better off forming an LLC or incorporating your business.
Changing your business structure can separate your personal assets from those of your business, thereby protecting them if your business should be sued. Also, you might find some tax advantages by switching to a different legal structure. After you’ve assessed which structure will serve your business most effectively, you can help ensure the necessary paperwork is filed correctly by asking your attorney to execute it or employing the help of a company that provides business document filing services.
7. Report important changes to your state
If you operate an LLC or corporation, you need to officially notify your state if you make any key changes to your company. Typically through an “Articles of Amendment,” states want to know if you have:
- Changed your business address
- Changed your company name
- Have had changes in membership on your company’s board of directors
If you’ve made other significant changes but are unsure if you need to communicate them, check with your state’s Secretary of State office. Better safe than sorry!
Get ahead in the new year
By putting time and energy now into tying up loose year-end business odds and ends, you’ll have less to worry about as the new year kicks into gear. Take inventory of what compliance and tax-related to-dos you have yet to accomplish—and get moving! It will be far easier to get ahead if you don’t let your business fall behind.
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