Thursday, June 20, 2019

Summertime is a Great Time to Check Up on Your Business

This time of year, we get to dig deep into storage and pull out the summer lake toys, dust off the lawnmower, and laze in the sun, which appears to have finally come out of hibernation. But it’s also a great time to run a quick check-up on our businesses, and make sure they’re fresh and ready to go for the busy seasons ahead. I’ve put together a short list of the most common “forgotten items” I find in discussions with clients and friends. How are you doing on this list?

  1. Annual Renewals. In Minnesota, if you filed a Certificate of Assumed Name, Minnesota Business Corporation, Foreign Business, Non-Profit Corporation, Cooperative, Limited Liability Company, Limited Liability Partnership, or Limited Partnership with the Secretary of State, you must file an annual renewal, beginning the year after your original filing, or else risk being “statutorily dissolved” (no longer be recognized as existing in Minnesota). If your entity has been statutorily dissolved, you can usually have it retroactively reinstated, but you will pay a fee for this, so don’t be late! Annual renewals, which also are usually filed along with a corporate tax return, are easy and free on the Secretary of State's website
  2. Annual Elections and Actions. If your entity is governed by a board or managers, and if your entity has officers, it’s a good idea to hold regular “elections” for those people (or entities) in accordance with your governing documents and applicable. This helps prove the legitimacy of your entity (one important factor when it comes to protecting personal assets from corporate obligations), and keeps your paperwork in order in case you need to prove anyone’s position (for example, if you apply for a loan or engage in a transaction later in the year). Depending on your governance structure, you may also need to keep up on at least annual written actions to ratify your previous acts and attend to other required business.
  3. Insurance. Even if you keep the same insurers and policies, it’s smart to meet with your insurance agent and go over your coverage. Have you acquired any new assets and forgotten to notify your insurer? Has the number or status of your employees changed? You could save yourself money by reporting changes, and most importantly, ensure that you are properly covered.
  4. Agreements. Are you familiar with any expirations or renewal options that may be coming up in your leases, vendor contracts, licenses, or other agreements? Even if an agreement doesn’t expire for another six months or even a year, deadlines for exercising renewal options can sneak up on you. You don’t want to miss these if they mean more favorable rates or uninterrupted business (or simply retaining your space!). Take a look through the terms and calendar your action items ahead of time.
  5. Addresses and Personal Info. Do you have current contact information for all your employees? Do you have a W-9 or at least a social security number or tax identification number for any independent contractors? It’s much easier to collect these items while people are present and willing than after they’ve collected payment and disappeared, so approach them now.
  6. Required Employer Postings. State and federal laws mandate certain posters be placed in an easily visible location in the workplace for employees. These posters are updated from time to time and must be kept current to comply with law and mitigate exposure to employee or regulatory claims. Most states provide them for free; in Minnesota, you can download and print the state posters and access most of the federal posters online.

This is just a brief list of the most frequently overlooked items I see. What else have you remembered last minute, or forgotten until it lapsed? I’d love to see your reminders for fellow entrepreneurs in the comments below! 

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