If you have a small business experiencing growth and success, chances are you may be thinking about its future. As the business grows, it’s important to ensure it stays in good standing.
Compliance means following the rules. Once an entrepreneur decides to incorporate or form an LLC, they will need to meet internal and external business compliance requirements. These requirements are determined by the startup’s state of incorporation.
Here’s a look at a few compliance requirements startups need to focus on to stay in good standing.
1. Update Operating Agreement and/or Corporate Bylaws
Businesses which incorporate must meet a set of internal compliance requirements. Those which incorporate as an LLC draft an operating agreement. This is a document which shares the rules and regulations for running an LLC. Businesses which incorporate as a corporation must draft bylaws. These outline the rules and regulations for operating the corporation. If there are any key details which change about the LLC or corporation’s internal management structure, updates must be made to its respective operating agreement and corporate bylaws.
In addition to drafting bylaws, corporations must take minutes during meetings. These minutes act as a record of the meeting. Minutes must be taken during each meeting and made available to members of the corporation for review.
2. File an Annual Report To Stay In Good Standing
Incorporated businesses must also be able to meet external requirements, which are compliance at the state and federal level. An annual report is one of several external compliance requirements for small businesses.
LLCs must file a statement of information known as an annual report with their state of incorporation. This document acts as a record to note any changes in an LLC. Some of these changes may include appointing new members, change in registered agent, or changes in business activity.
Make note of these changes within your LLC in its annual report. Your incorporated business will likely receive notice of the state of when its annual report is due. Make sure to file the report on time to ensure your incorporated business remains in good standing.
3. File Articles of Amendment
What if your business has experienced significant changes, such as change of its business name or changes in business ownership?
Changes in this type of information require filing articles of amendment to stay in compliance with your state of incorporation.
4. Pay Fees
There are a range of external fees you need to pay to stay in compliance and keep your small business in good standing.
For example, you may need to pay a small statement fee with your annual report filing or pay franchise tax fees. Check in with your local Secretary of State to learn more about these fees and determine the amount you will need to pay based off the documents you are filing. Remember to pay these fees on time. Your business may be charged with late fees or even penalized by the state for late payments.
5. Renew Business Licenses and/or Permits
Many businesses require business licenses and permits to operate in their respective industry, city, and county. After initialing obtaining a business license and/or permit for your company, remember to renew it as per state requirements. Determine the deadline for renewal and inquire if you will need to pay any additional fees for renewal. If you have any seller or sales tax licenses, make sure to get these renewed as well.
This is just a shortlist of items growing small businesses focus on to stay in compliance. Take care of internal and external compliance requirements. You’ll ensure your business stays in good standing.
Keep your small business in compliance with MyCorporation. Contact MyCorporation at mycorporation.com or give us a call at 877-692-6772.