Is your business ready to roll into the New Year? As we’re now in the home stretch of 2014, everyone’s schedules overflow with holiday festivities, family, and friends. But this is also an important time of year for the small business owner to tie up any legal loose ends. By taking care of these five things now, you’ll be sure to get off the ground running come January. 1) Change your business structure Did you start your business as a sole proprietorship or general partnership? If so, you’re not alone. But many small businesses outgrow these structures over time. If your business is not incorporated, consider filing your corporate formation paperwork (either for a corporation or Limited Liability Company, LLC) before the end of the year to establish your company as a separate business entity from you as an individual. Incorporating or forming an LLC for your business will help protect your personal assets, and may also give you added flexibility and potential savings on your taxes. The ideal time to submit your paperwork is before the end of the year or early January. 2) Close an inactive business If you have put the brakes on any kind of business venture this year, you should officially close it. Otherwise, the state or local government will still consider it active, and still expect your tax return, annual dues, etc. If you formed an LLC or Corporation, you will need to dissolve it with your state’s Secretary of State office. Get this done while it’s still 2014, so you don’t have to pay any fees or file paperwork in 2015. 3) Hold an annual meeting (corporation or LLC) Don’t forget that a corporation is required by law to hold an annual meeting for shareholders. An LLC isn’t typically required to do so unless it was written into the company documents when the LLC was formed. If you are required to hold an annual meeting and haven’t done so yet, make sure to fit one in during 2014. 4) Report any changes to the state (corporation or LLC) If your business is structured as a Corporation or LLC and you made any changes to your company information this year, you should update your state or other local government office. For example, did your business address change? Did a board member leave (or a new one join)? Did you change your official business name? In most states, the paperwork you need to file to report these changes is called an “Articles of Amendment.” There’s no particular deadline for this paperwork, but it’s good practice to make sure all your official company records are current before the year ends. 5) Review your estimated tax payments As we near the end of 2014, you should know how much your business took in and spent for the year, and assess your estimated quarterly tax payments accordingly. Have you paid too much or too little so far? Your final quarterly payment isn’t due until January, but it’s good practice to get caught up on bookkeeping before the end of the year. If you are fortunate enough to have more revenue that expected, you still have time to increase your business expenses and deductions for your 2014 taxes (as long as you put any equipment purchases to use by the end of the year). Final thoughts If your business has fallen out of compliance with the state, there is still time to bring it back to good standing. By doing it before the end of the year, you can still get the tax benefits of being a corporation or LLC for 2014. To get back in compliance, you’ll typically need to file a reinstatement form with the state’s secretary of state office and then pay any outstanding fees. The next few weeks will be busy for us all, but taking some time to wrap up the legal loose ends will give your business a fresh start in January! This guest post is by Nellie Akalp, a serial entrepreneur, small business expert, speaker and author. She currently serves as the CEO of CorpNet.com, an online legal document filing service, where she helps entrepreneurs start a business, incorporate or form an LLC and offers free business compliance tools. Connect with Nellie on Google+ and contact her at info@CorpNet.com.
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