Today, I welcome Nellie Akalp, CEO and Founder of CorpNet.com. CorpNet.com is an incorporation filing service specializing in assisting mompreneurs in getting their businesses off the ground quickly and affordably, whether it be incorporating their business, forming an LLC or filing a DBA. The year is ending and us mompreneurs need to make sure that our finances are in order!
She joins us today to share her End of the Year Legal Checklist for busy Mompreneurs.
We’re in the homestretch of 2010. And while our lives may have been hectic throughout the year, the intensity seems to heighten every December. There’s holiday shopping, travel plans, school vacations, baking, family… and then of course, there’s your business. If you’re a business owner, December is also that time of year to make sure you’ve got everything squared away for the New Year.
Yes, December is busy. But some legal and administrative decisions shouldn’t wait until you write your New Year’s resolutions. Here’s a snapshot of some of the things you should be thinking about while it’s still 2010…
If you have a new business, think about incorporating it before 2011
If you’ve started a new business in 2010 and still haven’t incorporated or formed an LLC, you might want to do so before 2011. Of course, bear in mind that your corporation’s ‘start date’ is not retroactive. Any tax benefits you might receive apply from the date you incorporated (if your corporation forms on December 11, you’ll still need to fill out your taxes as a ‘sole proprietor’ for all the previous months in 2010). For this reason, incorporating or forming your LLC is one issue which might be better deferred until 2011.
Of course, be aware that January is the absolute busiest time of the year at your state’s secretary of state office. By waiting until January, you will be at the mercy of a long backlog. However, you can also choose a ‘Delayed Filing’ with a document filing company. This means you get all your paperwork submitted now, and it will be held and filed on the first business day of 2011. And the good news is, you’ll be at the front of the line.
File your Annual Report for your corporation
Make sure you keep your business in good standing. Most states require some form of an annual report filing (some every year; some every two years). If your state requires you to file this report, there is a specific due date — 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. Be sure to know your specific filing deadline (check with your state’s secretary of state office). Missing this deadline can result in penalties and late fees — and in the worst case scenario, your company can be subject to suspension or dissolution.
If you’ve made any changes to your corporation, file your ‘Articles of Amendment’
Did you change your business address? Drop the ‘.com’ from your official company name (or make any other name change)? Did a board member or director leave the business? Any time you make a change to your corporation or LLC, you can basically count on having to file an official notification (referred to as an “Amendment”) with your state. In many states, these are called Articles of Amendment.
Tie up any legal loose ends before the New Year
As busy moms, we all have to prioritize…meaning some things get left behind. The end of the year presents a perfect opportunity for you to tie up any loose ends that you’ve put off throughout the year. 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?
If you have an inactive business, close it before 2011
Maybe you formed an LLC for a part time accounting business a few years ago. But over the past year, you’ve focused on other things, and haven’t actively promoted this business. It has no revenue, no customers. In every sense, you’ve basically closed your business – but 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 (where applicable). You’ll still be required to submit tax returns to the IRS and state.
You’ll need to file “Articles of Dissolution” or a “Certificate of Termination” document with the Secretary of State within the state that your Corporation or LLC was formed (and in most cases, you’ll need to settle any owed taxes before you can do this). Along these lines you should also cancel any kind of permit 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. Again, make sure to take care of these matters while it’s still 2010. There’s simply no reason to pay an extra cent in fees toward a business you know you’re retiring. Put that money towards your family or next venture instead!
While December may be a busy month, be sure to set aside some time to address your administrative obligations. In some cases, taking care of an issue in 2010 can help save you money in fees and penalties moving forward. And you can cross a few more things off your never-ending to-do list to start fresh in 2011.
About Nellie Akalp: