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 (Federal Employer ID Number)? Are all your necessary licenses and permits in order?
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 2013 can help save you money in fees and penalties moving forward. And in other cases, you can cross a few more things off your list to start fresh in 2014.
When it comes to some legal decisions, if you wait until you write your New Year’s resolutions, it will already be too late. So here’s a snapshot of some of the things you should be thinking about while it’s still 2013.
Started a New Business? Incorporate Before 2014
If you’ve started a new business in 2013 and still haven’t incorporated or Formed an LLC, you might want to do so before 2013. Keep in mind that your corporation’s ‘start date’ is not retroactive. Any tax benefits you might receive apply from the date you incorporated (i.e. if your corporation forms on December 15, you’ll still need to fill out your taxes as a ‘sole proprietor’ for all the previous months in 2013). For this reason, incorporating or forming your LLC is the one legal issue which might be better deferred until 2014. But be aware that January is the absolute busiest time of the year at your state’s secretary of state office, so by waiting until January, you will be at the mercy of a long backlog.
Already Incorporated? Be Corporate Compliant!
If you’ve gone through the work to incorporate your business, make sure you keep it 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 for filing each year – 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. Missing this deadline can result in penalties and late fees – and worst case scenario, your company can be subject to suspension or dissolution.
File Corporate Amendments Before 2014!
Did you change your address? Drop the ‘.com’ from your official company name (or any other name change)? Authorize more shares? 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.
Inactive Business? Close it before 2014!
Maybe you formed an LLC for a graphic design business a few years ago or you started an online venture. But over the past year, you’ve focused on your full-time day job, haven’t actively promoted this business, have no revenue, no customer. 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 will 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 2013. 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 next venture instead!
The days are shorter and 2013 is coming to an end. The holiday shopping has begun and travel plans are being made. But if you’re a business owner, no matter the size and scale of your business, it’s also that time of year to make sure you’ve got everything squared away for the New Year.