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Your business’s year-end, legal checklist

Matt McKinney is an attorney at BrownWinick Attorneys at Law  PGP_1038

From reassessing your business insurance policies, to reviewing your employee handbook and updating permits and licenses, the holiday season can serve as an annual reminder to prepare your organization for the new year. The list below could easily double or triple in length, but these three items capture fundamental business law issues that many organizations face.

Incorporate or change your business’s legal structure.  Whether you run a startup and hope to seek venture capital in 2015 or you are a partner in a partnership seeking greater liability protection, now is a great time to reassess your business’s legal structure to ensure it will meet your needs and expectations in 2015. A proper legal structure can not only help alleviate many liability concerns, but it can substantially impact tax consequences and help attract savvy employees and future investors. 

Secure authority to transact business in another state.  If business is booming or you are otherwise expanding in 2015 to transact business across state lines, ring in the new year on the right legal foot by securing a Certificate of Authority (if the new state’s law requires).  Some states, like Iowa, require certain out-of-state businesses to obtain a Certificate of Authority before transacting business in the state. Failing to obtain such approval may result in hefty fines and other legal ramifications. The ease and minimal cost of securing such a Certificate, if required, makes this item easy to checkoff your legal list.

Comply with corporate formalities.  Whether you overlooked holding an annual meeting for your corporation or failed to file a biennial report for your limited liability company, keep your business in good standing with the state and the law by complying with corporate formalities by year end.  Following corporate formalities may seem trivial, but doing so can help avoid significant legal headaches down the road.

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