This is the second in my New Year Series for 2015. The first post highlighted estate planning issues to consider in the New Year and this post is about legal issues for business owners to think about as we start off in 2015.
- Law Changes. Regardless of the state where a business operates, there are usually new laws, rules and regulations that go into effect every year. The lists are easy to find on the Internet and it is well worth doing some basic research for your state. Also, for any business that is regulated by a government agency, new regulations sometimes go into effect as well. Here is a simple summary for California from the Scramento Bee. Here is a similar list for law changes in 2015 in Washington from the Seattle times.
- Tax Filings. There are a large number of tax filings with which businesses must contend every year in the new year. In January, remember to file your Forms w-2 for employees and 1099 for contractors and other payees. Also, in January, a Form 940 is due for employees in addition to the quarterly Form 941. Remember that corporate tax returns are due on March 15th (a month before personal income tax returns are due). The Internal Revenue Service (IRS) publishes a calendar for self-employed and business owners that is very useful. This is the busiest time of year for your CPA so collect your records and get them submitted as soon as possible.
- Corporate Maintenance. If your business is a corporation, state law likely requires the filing of an annual report with the Secretary of State (California and Washington both have this requirement). In addition, your legal entity must be renewed and many licenses, including business and professional licenses, must also be renewed. Some states will send reminders but not all states do that so make sure that you know your filing obligations and deadlines and make a corporate calendar. Finally, if you are a corporation you are required to have an annual meeting, even if you are a single member entity, so make sure to comply with state law for corporate governance and keep records of your meeting. It is also a good idea to ratify last year’s decisions just to make sure that nothing fell through the cracks.
- Legal Risk Review. Many businesses update their plans for the new year and fail to think about re-assessing risk or re-visiting decisions made in the past. It is a good idea to check in with your CPA, your lawyer and your financial advisor and make sure that you are not missing anything. I have clients come in all the time because they formed one kind of entity back when they were smaller, or operating a different kind of business, and they just leave it in place when it should be changed.
Owning and operating a business is a challenge under the best of circumstances but each new year brings new changes in laws and a flurry of compliance requirements. Make sure that you know what your legal and compliance obligations are, create a calendar to track and remind you and make sure it is all done on time.
Of course, if you have troubles, please feel free to call or email your lawyer, CPA or other advisor for help.