A new year, a fresh state. Just like you make New Year’s resolutions regarding your health and personal aspirations, you should kick off each year knowing your business is in place to hit the ground running. Here is a list of legal considerations to make sure your business is on track to succeed in 2016 and every year to come.
1. Legal Structure. If your business is running as a sole proprietorship or is unincorporated, you are unnecessarily exposed to personal liability. Now is the time to incorporate. Speak to an attorney about which entity form will best suit the needs of your business and file the necessary paperwork with the Secretary of State. While you cannot backdate incorporation to safeguard you from past liabilities, you can start the new year off being protected.
2. Corporate Filings. After your entity is formed, you must keep it in good standing by filing annual/biennial statements with the Secretary of State, as well as by notifying it of any amendements to the entity’s information of record. California corporations and LLC’s must file a Statement of Information within 90 days of incorporation. Thereafter, Corporations must file the Statement of Information annually, while an LLC must file every other year. Both corporations and LLC’s must file a Certificate of Amendement if any changes are made to the corporate record, such as a name modification or a a change in registered agent.
3. Review Vendor or Third Party Contracts. Agreements your company has entered into may have expired, or may be about to expire. This could present opportunity, risks, or both. Now may be a good time to negotiate for better terms or to lock in favorable terms already in place.
4. Client Contracts. You might be still using client contracts drawn up in 2010, or you might be using boilerplate agreements taken from the internet. In either case, year-end is a great time to review the backbone of your business – your client contracts – and make sure they are tailored to your specific needs and those of your clients, and that they adequately protect you and your business.
5. Intellectual Property. A key component of any business is branding. If you have not secured the crucual elements of intellectual property, such as trademarks, trade dress, web address, or copyrights, your business’s brand is at risk. Filing a federal trademark for your unique business name or logo is relatively inexpensive and provides added protections against – and remedies for – future infringement. If you rely on trade secrets to protect the confidential information that is vital to your company’s success, such as customer lists, formulas, or methods of operations, make sure those trade secrets are properly identified and that you are taking all reasonable steps to safe-guard that information. Once such information is made available to the public, it is no longer a trade secret. Proper non-disclosure agreements and strategic confidentiality plan are vital to your protection.
6. Website. Your website is likely one of your best marketing tools, yet outdated terms of use, privacy policies, or infringing content can subject your business to liability. With internet law in a constant state of flux, you should make sure your company’s website is in compliance with the latest laws each and every year.
7. Employees. Are you debating whether some of your workers are employees or independent contractors? What are the ramifications of misclassifying? Now is a good time to assess each worker’s situation and have a contract outlining the rights and responsibilities of both the employer and the staff member. Do you have an employee handbook? If not, you need one. Having a valid employee handbook may be one of your best defenses against a lawsuit or other legal issue with employees.
8. Taxes. Now is a good time to gather your receipts, financial reports, and other tax documents. Touch base with your CPA before the busy season will put you ahead of the game.
2. Corporate Filings. After your entity is formed, you must keep it in good standing by filing annual/biennial statements with the Secretary of State, as well as by notifying it of any amendements to the entity’s information of record. California corporations and LLC’s must file a Statement of Information within 90 days of incorporation. Thereafter, Corporations must file the Statement of Information annually, while an LLC must file every other year. Both corporations and LLC’s must file a Certificate of Amendement if any changes are made to the corporate record, such as a name modification or a a change in registered agent.
3. Review Vendor or Third Party Contracts. Agreements your company has entered into may have expired, or may be about to expire. This could present opportunity, risks, or both. Now may be a good time to negotiate for better terms or to lock in favorable terms already in place.
4. Client Contracts. You might be still using client contracts drawn up in 2010, or you might be using boilerplate agreements taken from the internet. In either case, year-end is a great time to review the backbone of your business – your client contracts – and make sure they are tailored to your specific needs and those of your clients, and that they adequately protect you and your business.
5. Intellectual Property. A key component of any business is branding. If you have not secured the crucual elements of intellectual property, such as trademarks, trade dress, web address, or copyrights, your business’s brand is at risk. Filing a federal trademark for your unique business name or logo is relatively inexpensive and provides added protections against – and remedies for – future infringement. If you rely on trade secrets to protect the confidential information that is vital to your company’s success, such as customer lists, formulas, or methods of operations, make sure those trade secrets are properly identified and that you are taking all reasonable steps to safe-guard that information. Once such information is made available to the public, it is no longer a trade secret. Proper non-disclosure agreements and strategic confidentiality plan are vital to your protection.
6. Website. Your website is likely one of your best marketing tools, yet outdated terms of use, privacy policies, or infringing content can subject your business to liability. With internet law in a constant state of flux, you should make sure your company’s website is in compliance with the latest laws each and every year.
7. Employees. Are you debating whether some of your workers are employees or independent contractors? What are the ramifications of misclassifying? Now is a good time to assess each worker’s situation and have a contract outlining the rights and responsibilities of both the employer and the staff member. Do you have an employee handbook? If not, you need one. Having a valid employee handbook may be one of your best defenses against a lawsuit or other legal issue with employees.
8. Taxes. Now is a good time to gather your receipts, financial reports, and other tax documents. Touch base with your CPA before the busy season will put you ahead of the game.