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Review Your Corporate Documents

By Lane V. Erickson, Idaho Business Attorney

The new year is upon us and with it comes an opportunity to set goals for improvement and to start fresh in many areas of our lives. This would include making sure that your business is properly organized and that you are taking care of the things that you need to for your business to continue operating smoothly. 

Under the law, a business entity such as a corporation or an LLC is considered to be a separate person. Because of this, there is no reason why you couldn’t and shouldn’t set goals for your business for the new year. One of those goals should be to plan for and accomplish all the things that you need to do during the year for a business entity. 

For more than 70 years the premier Idaho business Attorneys at Racine Olson have assisted business clients in the creation and operation of corporations and LLCs. We take the time to meet with each client individually, to learn what their business needs are, and then help them customize structuring their business and its operations to meet all of our clients’ business needs. The attorneys on our premier Idaho business team include partners Lane V. Erickson and TJ Budge, and attorneys Nate Palmer and Dave Bagley. Each of the attorneys that our team is skilled, knowledgeable, and experienced in assisting clients with their business needs including organizing, creating, and helping in the operation of a corporation or an LLC.

The purpose of today’s article is to describe just a few things that you can do in this new year to help your business continue to operate in the way it should. In other words, think of this article as a prompt to help you set New Year’s resolutions for your business entity. 

Annual Meeting

The first thing that you should consider is holding and completing your annual meeting for your business entity. Regardless of whether your entity is a corporation or an LLC, your auntie is required to hold at least one annual meeting of the business owners per year. This is one of the simple corporate formalities that must be followed.

But holding the meeting alone is not enough. You also need to make a record of the meeting and of the business that was discussed. This is done through a document called minutes of the annual meeting. It could also simply be the secretary of the organization keeping track of all the things that were discussed and putting that record into the corporate record book. 

For larger business entities with many shareholders or members, we usually suggest that you schedule a formal meeting. This requires sending out a formal notice to all the shareholders or members. This notice would set the time, date, and location of the meeting and would also describe the various ways that shareholders are members could attend. In other words, they can attend in person, or usually by telephone conference call or video call. 

For small business entities that may only have a few shareholders or owners, this meeting to be much less formal. Usually, we are talking about a family-owned business. When this is the case, I often tell my clients that they can do something much simpler such as going to breakfast or lunch together. During this breakfast or lunch meeting, they discuss their goals for the business entity for the year and discuss any other business that needs to be taken care of. 

These meetings are often held to determine a few very specific things. For a corporation this would include naming and voting for directors who would be on the board. For a smaller entity such as an LLC it would include identifying who will act as the manager of the business for that year. There may also be a discussion of whether the corporation or LLC will allow shareholders or members to buy in. Finally, this meeting usually allows the corporate entity or LLC to transact any other business that requires votes from the shareholders or members. 

Again, once the meeting is completed, a record of all the business that was transacted during the meeting is made and entered into the corporate record book. This record is made available to any of the owners of the business whether they are shareholders or members. 

Accounting for Finances

A second thing that could be accomplished in the beginning of the new year for a corporation or an LLC is making sure that the accounting and reports for finances are complete. In other words, most businesses operate on a regular calendar year. This means that you will likely want to complete a profit and loss statement or an income earning statement. You would also want to complete a statement of cash flows. Additionally, you will want to complete a balance sheet or a statement of financial condition for your business entity. 

These are not the only reports you may want to complete. You may also want to take a close look at your accounts receivable and an aging report associated with that. Any accounts that are long past due should be the focus of your efforts to collect in the New Year. Furthermore, it would be wise for you to consider any of the accounts payable that you have. You should have a plan on how you will handle and pay for the debt that the corporation is carrying.

Finally, it is wise to look over your business plan and see if any adjustments or changes need to be made. A business plan would include every aspect of your business including budgets, financial planning, strategic planning, employee and personnel planning, and any other planning that needs to be taken into consideration such as expansion or contraction of the business. 

These kinds of documents and reports are often kept by an entity and prepared on a quarterly basis. Because we reached the end of the year, these financial and planning documents would provide an overview of your business for the entire year that just ended and give you an idea of the things that you should be planning for in the new year. 

Prepare for Tax Filings

The last thing that we will talk about is preparing for any tax filings that need to be done. Depending on the type of entity that you are operating, it is possible that there may be tax liabilities that need to be addressed for the business. Even if your business is a pass-through entity such as an LLC, you are usually still required to file tax documents with the state and federal governments indicating the pass-through income for the business entity.

Regardless of the type of entity that you are operating, tax filings are always an important part of the documentation that must be completed. Starting now, at the beginning of a new year, to pull together all the records and information you need to complete your tax filings will make your job much, much easier. 

This is just a short summary of the things that you should be considering taking care of now that we are in a new year. We don’t expect you to know and understand everything associated with how your business needs to operate. If you have questions or concerns, we are confident that we can help. Please contact us for a consultation where we can review your business structure and help you make strategic decisions to help your business entity move forward successfully. 

Enlist an Idaho Business Attorney to Help You

Our team of Idaho business lawyers can help you with any of your business structure or operation needs. Whether you are seeking to create a new business or review a current business, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a free consultation. You can also email us directly at lane@racineolson.com or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho business problems.

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