As the summer months come to a close, small businesses are preparing for their own version of “back-to-school” by going back to business. Many small business owners may be focusing on holiday campaigns while others are hiring employees and interns. However, in the midst of this Q3 (and Q4) prep, business compliance should also be top of mind.
What Does Compliance Look Like For Businesses?
Staying in compliance is about more than incorporating as an entity formation and registering trademarks. It means taking care of additional ongoing maintenance that helps keep your business compliant with the state.
A few necessary steps to keep a business in compliance may include but are not limited to:
- Obtaining required business licenses.
- Filing an annual report.
- Ordering a certificate of good standing.
- Registering for a DBA (if you are doing business under an alternate name).
Getting your small business in compliance is as easy as A, B, C! Here’s what entrepreneurs need to know to keep their business in good standing.
1. Obtain Business Licenses
What’s a business license?
Filing for a business license allows you to legally operate a small business. This government-issued document also helps identity the business and hold it accountable for its actions. Business licenses track the company’s activities for tax purposes, and serve as a notice to citizens of activities that may impact them. A business license also protects public health. For example, imagine you run a restaurant. A consumer may feel much more at ease to dine at a licensed restaurant than an unlicensed one. This is because having a business license signifies the business has met its necessary minimum requirements.
How does a business license keep my business in compliance?
Most businesses are required by the state they do business in to register for a business license. Some businesses may also need additional permits, depending on their industry and state requirements. What happens if a small business decides not to obtain its necessary business licenses, but remains in operation anyway? That business may be in danger of being fined, or even shut down. The best way to avoid this is to file for any required business licenses as soon as possible. Once you have received these licenses, you may operate the business with the peace of mind in knowing you’re staying in compliance with state requirements.
2. File An Annual Report
What’s an annual report?
Did you form an LLC or incorporate as a corporation? You’ll need to file an annual report on behalf of your business. An annual report is essentially a record of the activities and changes that go on within a business. This information includes the name of your business, its current address, the name and address of your registered agent, names and addresses of the LLC or corporation’s members and/or officers, and a description of current business activities. Any changes noted in the annual report must also be updated in your operating agreement and/or bylaws as well.
How does an annual report keep my business in compliance?
Filing an annual report tells the Secretary of State this is the most up-to-date information available about your business. If you do not file in time, your corporation or LLC could be subject to penalties. These may include late fees imposed by the state, suspension, or involuntary dissolution. Filing in a timely manner is one of the simplest ways small businesses can stay on top of their annual maintenance. When you file an annual report, you meet ongoing state regulations and keep their business in compliance with the state.
3. Order a Certificate Of Good Standing
What’s a certificate of good standing?
You know your business is legitimate, but does the state also know this too? A certificate of good standing is a certificate issued by a state official that serves as evidence your corporation or LLC is in existence. Once you have ordered a certificate of good standing, your business may complete transactions in the state it does business in.
How does a certificate of good standing keep my business in compliance?
A certificate of good standing does more than allow a business to complete transactions. Some companies that conduct business with you may request to see it. Having this certificate proves that your business is in compliance with rules required by law.
Additionally, having a certificate of good standing provides other benefits to small businesses. Some circumstances where it may be required include obtaining financing, opening a bank account, renewing licenses, and selling a business.
4. Register For A DBA
What’s a DBA?
DBA is an acronym for doing business as name. This is also sometimes referred to as a fictitious or trade name. If you file for a DBA, you’re filing for the ability to operate business under a name different from your legal business name. You may open a business bank account and accept payments under an alternate business name with a DBA.
How does a DBA keep my business in compliance?
Not every business will choose to file for a DBA. This filing is only necessary for businesses that plan to conduct business or accept money under a name that is not their own personal name. If this is the case, then it’s critical to file for a DBA. Doing so ensures that you may do business under an alternate name, and remain in compliance in the state.
Let Us Check If Your Business Is In Compliance!
Even if you did everything listed above, it’s possible your business may not be in compliance with current state laws. Don’t guess which laws you’re in (or out) of good standing. Let us help with our business compliance check service!
Our experienced specialists work to check your business status with the state. We research and advise you on any required filing deadlines coming up. Did your business fall out of good standing? Our talented team will work to help get you back in compliance. If your business is inactive, we’ll dissolve it for you to avoid any business penalties.
Anyone can use our business compliance check service, no matter which industry your business is in, where it is formed, or its business structure. Your compliance needs may shift as your business grows and changes over time, and our experienced professionals are ready to ensure your business remains in good standing.